What Are Aggregate Loans?

Most college graduates have to deal with the reality of paying back their student loans. The good part about student loan programs is that they provide people who might not be able to go to college the chance for a higher education. But once undergrad or grad school is finished, it’s time to think about the best way to pay back what you’ve borrowed. Aggregate loans refer to the cumulative amount borrowed for higher education.

Annual Loan Limits

Each year students borrow the amount they need to pay for those semesters of education. The Department of Education sets up limits on the annual amount each student can borrow. This amount will become part of the total aggregate amount when the student finishes her education. The annual amount a student can borrow can’t exceed the amount it actually costs the student to attend school, so even if the maximum is borrowed each year, it won’t go over the aggregate loan limit.

Types of Loans

Department of Education loans come in two basic types: subsidized, where the government covers interest payments while you are in school, and unsubsidized. Each category has set amounts that can be borrowed during a school year. For Stafford loans, the repayment terms begin six months after a student graduates or falls to half-time status. Unsubsidized and subsidized loans have different interest rates for undergraduate and graduate studies. When a student graduates, the loans can be consolidated and the cumulative aggregate amount is paid off on an installment plan.

Aggregate Loan Limits

The aggregate loan limit is the cumulative lifetime amount a student is allowed to borrow in Department of Education loans. The aggregate amount applies to undergraduate and graduate studies, continuing education programs and other educational opportunities along the way. The aggregate loan limit includes any unpaid balances on Department of Education loans, no matter how many years it’s been between educational experiences. So any unpaid amount affects how much you can borrow later.

Understanding Loan Terms

Understanding each student loan you have is important in terms of repayment and borrowing more money later. For instance, if you don’t pay the loan interest off in the summer of each school year, that amount becomes part of your aggregate amount. If you delay consolidation and repayment for as long as possible, the interest accrues and adds to your principal. The sooner you can begin repaying your student loans the better off you are, especially in terms of borrowing more money later.

About the Author

Patti Richards has been a writer since 1990. She writes children’s books and articles on parenting, women's health and education. Her credits include San Diego Family Magazine, Metro Parent Magazine, Boys' Quest Magazine and many others. Richards has a Bachelor of Science in English/secondary education from Welch College.