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Tutt Library Research Guides

Financial Literacy: Student Loans and Aid

resources to build and help understand financial obligations and concerns

Federal Student Aid

How much money can I borrow in federal student loans?

  • If you are an undergraduate student: 
    • Up to $5,500 per year in Perkins Loans depending on your financial need, the amount of other aid you receive, and the availability of funds at your college or career school. 
    • $5,500 to $12,500 per year in Direct Subsidized Loans and Direct Unsubsidized Loans depending on certain factors, including your year in college.
  • If you are a graduate student:
    • Up to $8,000 each year in Perkins Loans depending on your financial need, the amount of other aid you receive, and the availability of funds at your college or career school. 
    • Up to $20,500 each year in Direct Unsubsidized Loans.
    • The remainder of your college costs not covered by other financial aid in Direct PLUS Loans. Note: A credit check is required for a PLUS loan.
  • If you are a parent of a dependent undergraduate student:
    • The remainder of your child’s college costs that are not covered by other financial aid. Note: A credit check is required for a parent loan (called a PLUS loan). 

- from https://studentaid.ed.gov/sa/types/loans

Grants and Scholarships

Grants and scholarships are free money to help pay for college or career school.

U.S. Department of Education offers a variety of federal grants to students attending four-year colleges or universities, community colleges, and career schools. Almost all of those grants are awarded to students with financial need

If you are interested in these grants, or in any federal student aid, you have to start by submitting a Free Application for Federal Student Aid (FAFSA®).

- from https://studentaid.ed.gov/sa/types/loans

Tax Benefits

Tax Credits for Higher Education Expenses

Two tax credits help offset the costs (tuition, fees, books, supplies, equipment) of college or career school by reducing the amount of your income tax:

  • The American Opportunity Credit : claim up to $2,500 per student per year for the first four years of school
  • The Lifetime Learning Credit : claim up to $2,000 per student per year for any college or career school tuition and fees, as well as for books, supplies, and equipment that were required for the course and had to be purchased from the school.

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.

 

- from https://studentaid.ed.gov/sa/types/loans

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