How to Draw the Maximum Student Loan

Student loans are a smart source of educational funds.

Student loans are a smart source of educational funds.

Deciding to max out a student loan is a tough decision for many students to make. Most folks don’t like the idea of graduating school and being in debt. However, the interest on these loans is much lower than credit card rates, plus you can write off student loan interest on your tax return. You can’t do that with credit card or other personal loan interest. If you’ve decided to enroll in classes and need money to meet educational expenses, this is actually a smart way to borrow. Student loan funds are flexible and can be used for tuition, fees, books and living expenses.

Review your financial aid award letter. Once you’re accepted to the college and complete a FAFSA application, you’ll receive an award letter from the financial aid office that lists the cost of your attendance and the amounts and types of financial aid that have been awarded to you. Your total award package may contain federal and state grants and federal loans. In most cases, your school automatically accepts any grants you’ve been awarded because it’s free money.

Read instructions for accepting the award. Your award letter states whether you must respond in writing or online through the financial aid menu in your student account.

Request the maximum loan amount. Your loan awards cover the whole year, which is typically two semesters. If you plan on attending only two semesters, choose the option to accept the full amount of all awards. If you plan on taking summer classes, choose the option to accept partial amounts. This leaves you with some extra cash to borrow for the summer semester. If you accept partial amounts, you’ll request the remaining amount from your financial aid office when you register for the summer. As long as you take the summer classes, you’ll still receive the maximum loan amount for the year.


  • If you’re not a first-year student, your school may send award letters to your student email address instead of through the mail or may expect you to go to a password-accessed website to check your aid awards.


  • Loans must be repaid. Don't accept more financial aid than you expect to be able to repay upon graduation.

About the Author

With a background in taxation and financial consulting, Alia Nikolakopulos has over a decade of experience resolving tax and finance issues. She is an IRS Enrolled Agent and has been a writer for these topics since 2010. Nikolakopulos is pursuing Bachelor of Science in accounting at the Metropolitan State University of Denver.

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