Terms to Know


What's an aggregate loan limit?
What's cost of attendance (COA)?
What's a deferment?
What's exit counseling?
What's forbearance?
What's a grace period?
What's a promissory note?

What's an aggregate loan limit?
An aggregate loan limit is the highest total Federal Direct Loan debt you can accumulate while you're enrolled in a college or university. This maximum includes money you borrow through the Direct Loan program plus any FFEL Program loans.

If you enroll in more than one college or university during your student years, all loans you took count toward the aggregate, or combined, limit.

The aggregate amount includes separate limits on Subsidized and Unsubsidized Direct Loans. The amount differs depending on whether you are a dependent undergraduate student, an independent undergraduate student, or a graduate student. If you are a dependent undergraduate but your parents were unable to obtain a PLUS Loan, your aggregate limit is the same as that for an independent undergraduate.

The current aggregate limits are:

  • $31,000, with no more than $23,000 in subsidized loans, for dependent undergraduate students
  • $57,500, with no more than $23,000 in subsidized loans, for independent undergraduates or dependent undergraduates whose parents could not obtain PLUS Loans
  • $138,500, with no more than $65,500 in subsidized loans, in combined undergraduate and graduate debt for graduate students
  • $224,000 for graduate and professional students in certain approved health profession programs

What's cost of attendance (COA)?
Cost of attendance (COA) is an average cost that represents both direct and indirect expenses a student may expect to incur to attend school over a given period of time. It's calculated by the school and includes tuition, fees, room and board, and allowances for books, supplies, transportation, loan fees, and some personal expenses. If you don't live on campus, an amount for housing and food replaces the amount for room and board.

Additional amounts may also be included in certain circumstances, such as a having a disability or needing to provide dependent care while you go to class.

Your cost of attendance helps to determine how much you are eligible to borrow in federal, institutional, and private loans.

What's a deferment?
A deferment temporarily suspends your federal student loan repayments. You may qualify if you are unemployed, are having certain other economic hardships, are returning to school at least half-time, or are on active or post-active military duty.

If the deferral is granted and you're enrolled at least half-time or on qualifying military duty, there is no time limit on a deferment. In other cases, you can defer payments for up to a total of three years.

Interest does not accrue on Subsidized Direct Loans and Perkins Loans during a deferment. It does accrue on Unsubsidized Direct Loans and PLUS Loans.

What's exit counseling?
Federal law requires that all students with federal student loans participate in an exit counseling session when they are about to graduate or are no longer enrolled in school at least half-time. Either of those events triggers the start of the grace period before loan repayment must begin.

Participating in exit counseling does not mean you won't qualify to re-enroll in undergraduate studies or enroll in a graduate or professional program. The session is intended to remind you of your obligation to repay your student loans, explain your repayment options, and answer any questions you may have.

What's forbearance?
Forbearance lets you temporarily postpone repayment of your federal student loans, reduce the amount of each payment, or extend the repayment period. Forbearance requests are granted for a 12 month period and may be extended at expiration, for a total of three years.

Interest accrues on all types of loans, including Subsidized Direct Loans, during periods of forbearance. You are responsible for paying the interest.

Remember that applying does not guarantee your request will be granted by your loan servicer in the case of Direct and PLUS Loans, or your college or university in the case of Perkins Loans.

What's a grace period?
With a federal student loan, the grace period is the amount of time between the date you graduate or fail to enroll at least half-time and the date your first loan repayment is due.

With a Direct Loan, the grace period is six months. With a Perkins Loan, the grace period is nine months.

What's a promissory note?
A promissory note, also known as a master promissory note (MPN) is a legal agreement between you and your lender. By signing it, you agree to repay what you borrow.

The note explains your rights and responsibilities as a borrower, how interest on your loan is calculated, and how you repay. It also explains deferment, forbearance, cancellation, and other remedies you may qualify for if you have trouble repaying your loan.

It's important to save every promissory note you sign because you will need it when you begin to repay.