Monday, August 19, 2013

Financial Aid Lifetime Limits

The federal government has been working on lifetime limits for different types of financial aid. Some of the rules have been changing as far as how much FA you can receive in your lifetime. Hopefully, you don't borrow enough loans to reach your lifetime loan limits.

Currently, Subsidized loans have a lifetime limit of $23,000, and Unsubsidized loans have a lifetime limit of $36,500. However, remember that the max amount a dependent student can receive their first year is $5500, and the maximum an independent student can receive their first year is $9500. Typically, this breaks down to up to $3500 of either can be Subsidized. 

Also keep in mind that students are broken down into years by the length of their program. If you are in a 1 year program (or less) then the max Subsidized loan you can get is $3500. If you are in a program more than 1 year up to 2 years, then your 2nd year can qualify you up to $4500 in Subsidized loans. It is possible to have a $5500 and $6500 Subsidized loan, but you'd have to be a 3rd and 4th year student to qualify for those (and by 3rd and 4th year student, I mean in a 3 or 4 year program, like a bachelor's program). If you are an independent student, then you have a greater chance of hitting your lifetime eligibility if you keep going to school. This is because you can receive up to $6000 of Unsubsidized loans a year. It only takes six years to end up around your maximum, so make sure you make wise decisions!

Don't forget that Pell Grants have a lifetime eligibility too. New for the previous award year, the lifetime eligibility for Pell Grants was lowered from 900% down to 600%. Each 100% is a full academic year, no matter of the amounts. This means two things. Firstly, the lifetime limit was lowered from a total of nine academic years down to six academic years. Secondly, amounts don't matter, so if one year you qualified for $5000 and earned all $5000, then that was your 100% that year. If you qualified the next year for $2000 and earned all $2000, then that also was 100%, making you have a total of 200% at $7000. If you have two people and one gets $1000 and the second receives $5500, then if they both stay the whole year, then they both have 100% earned, even though they aren't close to the same amount. 

Hopefully you don't use your entire limits of FA eligibility. The federal government wants students to get into college, earn their degrees, and graduate without going back over and over or not finishing and going from school to school. They want people to be completers and entering the job market. Keep that in mind if you decide to change your mind!

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