Federal Student Aid Programs: Fill & Download for Free

Distributions from a 529 college savings plan are tax-free only if used to pay for qualified higher education expenses at a college or university that is eligible for Title IV federal student aid. Such a college will have a federal school code that can be listed on the Free Application for Federal Student Aid (FAFSA). There are more than 100 foreign colleges that are eligible for federal student aid. You can find a list at the end of http://ifap.ed.gov/fedschcodelist/attachments/1213FedSchoolCodeList.pdf.If the intention is not to enroll in a foreign institution but to participate in a study abroad program, you can use 529 plan funds to pay for it if the study at the foreign institution is eligible for credit at the student's US home institution (and the US institution is eligible for Title IV federal student aid).

How much student loans do I need?Instead of asking “How much student loans can I get?” consider how much you really need.The answer to this question is going to be different for each individual. Depending on your school’s tuition, room and board, books, and living costs, your college expenses could differ wildly from someone else’s. CollegeBoard’s tool to calculate how much college will cost. Student loans aren’t limitless. The maximum amount you can borrow depends on factors including whether they’re federal or private loans and your year in school. Undergraduates can borrow up to $12,500 annually and $57,500 total in federal student loans. Graduate students can borrow up to $20,500 annually and $138,500 total. But just because you can borrow that much doesn’t mean you should. To keep higher education affordable, calculate how much you should borrow for college based on your expected future earnings and aim to keep your student borrowing below that amount.You can also borrow less if you get grants, scholarships, and other student aid that doesn’t have to be repaid. The FAFSA4Caster tool can help you estimate how much federal aid you’re likely to receive, and how much you’ll have to finance with loans.How Much Money You Can BorrowThere are two types of student loans available—federal and private. It is best to maximize the amount of money borrowed through federal student loans first before turning to private lenders. Current federal student loan lending limits are illustrated in the graph below, with a description to follow:Federal student loan limitsThe first type of loan that students should consider is federal student loans, which are offered through and guaranteed through the Direct Loan Program. This program offers four types of Direct Loans, and caps how much you can borrow with each under the following rules:Annual limits: The maximum amount of that the borrower can take out in an academic year.Aggregate limits: The maximum cumulative amount that a borrower can borrow in student loans.Cost of attendance: In addition to annual and aggregate limits, the federal government also limits loans by your costs. It will not allow borrowers to take out more student loans than their college program costs.How much student loans you can get, specifically, will vary by your student status. For example, the Direct Loan program lends less to students who are dependents (per FAFSA guidelines), or who are in their first or second year of college. For independent students and upperclassman, the borrowing limits are higher.Here are the federal student loan limits for different types of Direct Loans.Type of federal student loanWho can get this loan?Annual loan limitAggregate limitDirect Subsidized LoansUndergrads with demonstrated financial need$3,500 for freshmen, up to $5,500 for upperclassmen$23,000Direct Unsubsidized Loans*Undergrads$5,500 for dependent freshmen, up to $12,500 for independent upperclassmen$57,500Direct Unsubsidized Loans* (graduate students)Graduate and professional students$20,500$138,500PLUS LoansGraduate and professional students, and parents of undergraduatesCost of attendance (after all other student aid is applied)NoneTo access these federal student loans, you’ll need to file a FAFSA. The colleges you’ve applied to use your FAFSA information to evaluate your need and eligibility for federal student aid, including loans. Next, these colleges will send you financial aid award letters outlining what kinds of aid you can get.So as you want to know how much student loans you can get, pay attention to this letter. It will list the types and amounts of federal student loans you’re being offered.Private student loan limitsPrivate student loans are offered by banks and lenders directly to students and their parents. They aren’t part of the federal government’s programs, so they won’t have the same rules for how much student loans you can get.This can actually be good news for students who have hit their federal student loan limits and still have costs to cover. For instance, if you go to a more expensive university and pay a higher tuition, those federal student loans won’t go as far. In these cases, private student loans can help to cover any leftover costs.What you can borrow with private student loans will also vary by lender, as each bank will have its own lending rules. Here’s what private lenders will look at when deciding on your student loan amount:Lenders’ limits or guidelines: Each bank or lender will have its own limits on annual borrowing, while others may just have a certain maximum yearly amount you can borrow. Citizens Bank’s private student loans, for example, are limited at $100,000 for undergraduates.Credit qualifications: Lenders might limit student loan amounts based on your qualifications for a loan, too. You’ll need good credit to get a private student loan, for example. If you do not have any credit history you’ll likely need a parent or trusted adult cosign the loan for you.Education and employment: Private lenders might also limit loan amounts to what they determine will be affordable. To figure this out, they might look at details such as the type of degree you’re earning, and your cosigner’s income.Cost of attendance: Lastly, most private lenders will also consider your cost of attendance when deciding how much student loans you can get from them. Many will offer financing of up to 100% of your cost of attendance, but few private lenders will let you borrow more than what your program costs.

In the U.S., I would have my child file an application for student financial aid with the federal government, my state student aid agency, and the institution’s financial aid office.In the U.S., student aid is based on ability to pay. You and your child should complete the Free Application for Federal Student Aid (FAFSA), which is available on the U.S. Department of Education’s web site. Federal, state, and institutional student aid programs use the information on the form about your and your child’s income and financial resources to determine how great your child’s need is and how much aid he or she should receive. The institutional student aid office can match that information against the cost of attendance (tuition and fees, books and supplies, room and board, transportation, and other things — not just tuition) to determine the level of need.A “prestigious” institution is likely to have enough student aid to meet your child’s remaining need after any aid from the federal and state governments. Some institutions have “no loan” student aid programs that use only grants and student jobs to meet the need. You might check the web site of the institutions that interest your child to see whether they mention such a policy.In the U.S., student aid decisions are made only after applicants are admitted, so need is not a negative factor in the admission process.