$57,500 for undergraduates-No more than $23,000 of this amount may be in subsidized loans. $138,500 for graduate or professional students-No more than $65,500 of this amount may be in subsidized loans. The graduate aggregate limit includes all federal loans received for undergraduate study.
Student Loan Interest Deduction
You can take a tax deduction for the interest paid on student loans that you took out for yourself, your spouse, or your dependent. This benefit applies to all loans (not just federal student loans) used to pay for higher education expenses. The maximum deduction is $2,500 a year.
There's a general rule floating around stating that your total student loan balance should not exceed your expected starting salary out of college. So if, based on your desired profession, you anticipate making $50,000 your first year after college, you wouldn't want your student loan balance to exceed $50,000.
Eligibility for Pell Grants
For the 2024-2025 FAFSA, a family of four living in the 48 contiguous states making up to $52,500 in AGI qualified for the Maximum Pell Grant.
Your potential savings from refinancing will vary based on your loan terms. For example, say you have a $50,000 loan balance with a 6.22% interest rate — the average student loan interest rate for graduate students. On the standard 10-year repayment plan, you'd pay $561 per month and $17,277 in interest over time.
Overall, only 1% of all U.S. adults owed at least $100,000. Young college graduates with student loans are more likely than those without this kind of debt to say they struggle financially.
A good rule of thumb is to borrow about 125% of the difference between your net college costs and the amount of income and savings you can devote to paying those costs, rounded up to the nearest $1,000.
To claim the American opportunity credit complete Form 8863 and submit it with your Form 1040 or 1040-SR. Enter the nonrefundable part of the credit on Schedule 3 (Form 1040 or 1040-SR), line 3. Enter the refundable part of the credit on Form 1040 or 1040-SR, line 29.
Reporting the amount of student loan interest you paid in 2023 on your federal tax return may count as a deduction. A deduction reduces the amount of your income that is subject to tax, which may benefit you by reducing the amount of tax you may have to pay.
If you're an undergraduate, the maximum combined amount of Direct Subsidized and Direct Unsubsidized Loans you can borrow each academic year is between $5,500 and $12,500, depending on your year in school and your dependency status.
For applications submitted directly to Sallie Mae, loan amount cannot exceed the cost of attendance less financial aid received, as certified by the school. Applications submitted to Sallie Mae through a partner website will be subject to a lower maximum loan request amount.
Request additional federal student loans.
If you've exhausted other options, you can consider borrowing additional federal student loans. If you're a dependent student, your parent can apply for a Direct PLUS Loan for parents.
Average Student Loan Payments
As of May 30, 2023, the average monthly payment for federal student loans was estimated to be about $500 per month when adjusted for inflation. However, the final number depends on the type of loan, loan amount, interest rates, and repayment plan.
This can leave borrowers with six-figure education debt worried that typical student loan advice may not apply to their situation. And the number of borrowers with high education debt is growing. As of 2023, there are one million federal student loan borrowers who owe $200,000 or more, according to StudentAid.gov.
Let's say you have $200,000 in student loans at 6% interest on a 10-year repayment term. Your monthly payments would be $2,220. If you can manage an additional $200 a month, you could save a total of $7,796 while trimming a year off your repayment plan.
What income is too high for FAFSA? There is no income that is too high to file a FAFSA. No matter how much you make, you can always submit a FAFSA. Eligibility for need-based financial aid increases as the cost of attendance increases, so even a wealthy student might qualify for financial aid at a higher-cost college.
There is no income cut-off to qualify for federal student aid. Many factors—such as the size of your family and your year in school—are considered.
It is free money that you do not have to pay back. However, students who leave school early may have to give the money back to the school. The Pell Grant is for students with the most financial need, and there is no deadline to apply. The amount can change depending on changes in your life.