---
kind: "section"
citation: "20 U.S.C. § 1075"
title: "20"
title_heading: "Education"
number: "1075"
heading: "Limitations on individual federally insured loans and on Federal loan insurance"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/20/1075"
units:
  - "Chapter 28 — Higher Education Resources and Student Assistance"
  - "Subchapter IV — Student Assistance"
  - "Part B — Federal Family Education Loan Program"
---

# §1075. Limitations on individual federally insured loans and on Federal loan insurance

- (a) **Annual and aggregate limits—**
  - (1) **Annual limits—**
    - (A) The total of [loans](/usc/20/1066a.md?p=2) made to a student in any [academic year](/usc/20/1088.md?p=a-2-A) or its equivalent (as determined by the [Secretary](/usc/20/1003.md?p=17)) which may be covered by Federal [loan](/usc/20/1066a.md?p=2) insurance under this part may not exceed—
      - (i) in the case of a student at an [eligible institution](/usc/20/1058.md?p=b) who has not successfully completed the first year of a program of undergraduate education—
        - (I) $3,500, if such student is enrolled in a program whose length is at least one [academic year](/usc/20/1088.md?p=a-2-A) in length (as determined under [section 1088 of this title](/usc/20/1088.md)); and
        - (II) if such student is enrolled in a program of undergraduate education which is less than one [academic year](/usc/20/1088.md?p=a-2-A), the maximum annual [loan](/usc/20/1066a.md?p=2) amount that such student may receive may not exceed the amount that bears the same ratio to the amount specified in [subclause (I)](#a-1-A-i-I) as the length of such program measured in semester, trimester, quarter, or clock hours bears to one [academic year](/usc/20/1088.md?p=a-2-A);
      - (ii) in the case of a student at an [eligible institution](/usc/20/1058.md?p=b) who has successfully completed such first year but has not successfully completed the remainder of a program of undergraduate education—
        - (I) $4,500; or
        - (II) if such student is enrolled in a program of undergraduate education, the remainder of which is less than one [academic year](/usc/20/1088.md?p=a-2-A), the maximum annual [loan](/usc/20/1066a.md?p=2) amount that such student may receive may not exceed the amount that bears the same ratio to the amount specified in [subclause (I)](#a-1-A-ii-I) as such remainder measured in semester, trimester, quarter, or clock hours bears to one [academic year](/usc/20/1088.md?p=a-2-A);
      - (iii) in the case of a student at an [eligible institution](/usc/20/1058.md?p=b) who has successfully completed the first and second years of a program of undergraduate education but has not successfully completed the remainder of such program—
        - (I) $5,500; or
        - (II) if such student is enrolled in a program of undergraduate education, the remainder of which is less than one [academic year](/usc/20/1088.md?p=a-2-A), the maximum annual [loan](/usc/20/1066a.md?p=2) amount that such student may receive may not exceed the amount that bears the same ratio to the amount specified in [subclause (I)](#a-1-A-iii-I) as such remainder measured in semester, trimester, quarter, or clock hours bears to one [academic year](/usc/20/1088.md?p=a-2-A); and
      - (iv) in the case of a [graduate](/usc/20/1061.md?p=1) or professional student (as defined in regulations of the [Secretary](/usc/20/1003.md?p=17)) at an [eligible institution](/usc/20/1058.md?p=b), $8,500.
    - (B) The annual insurable limits contained in [subparagraph (A)](#a-1-A) shall not apply in cases where the [Secretary](/usc/20/1003.md?p=17) determines, pursuant to regulations, that a higher amount is warranted in order to carry out the purpose of this part with respect to students engaged in specialized training requiring exceptionally high costs of education. The annual insurable limit per student shall not be deemed to be exceeded by a [line of credit](/usc/20/1085.md?p=e) under which actual payments by the [lender](/usc/20/1019.md?p=6) to the borrower will not be made in any year in excess of the annual limit.
    - (C) For the purpose of [subparagraph (A)](#a-1-A), the number of years that a student has completed in a program of undergraduate education shall include any prior enrollment in an [eligible program](/usc/20/1088.md?p=b-1) of undergraduate education for which the student was awarded an associate or baccalaureate degree, if such degree is required by the institution for admission to the program in which the student is enrolled.
  - (2) **Aggregate limits—**
    - (A) The aggregate insured unpaid principal amount for all such insured [loans](/usc/20/1066a.md?p=2) made to any student shall not at any time exceed—
      - (i) $23,000, in the case of any student who has not successfully completed a program of undergraduate education, excluding [loans](/usc/20/1066a.md?p=2) made under [section 1078–1](/usc/20/1078–1.md)[^1] or [1078–2](/usc/20/1078–2.md) of this title; and
      - (ii) $65,500, in the case of any [graduate](/usc/20/1061.md?p=1) or professional student (as defined by regulations of the [Secretary](/usc/20/1003.md?p=17)) and (I) including any [loans](/usc/20/1066a.md?p=2) which are insured by the [Secretary](/usc/20/1003.md?p=17) under this section, or by a [guaranty agency](/usc/20/1085.md?p=j), made to such student before the student became a [graduate](/usc/20/1061.md?p=1) or professional student),[^2] but (II) excluding [loans](/usc/20/1066a.md?p=2) made under [section 1078–1](/usc/20/1078–1.md)[^1] or [1078–2](/usc/20/1078–2.md) of this title,

      except that the [Secretary](/usc/20/1003.md?p=17) may increase the limit applicable to students who are pursuing programs which the [Secretary](/usc/20/1003.md?p=17) determines are exceptionally expensive.

    - (B) The [Secretary](/usc/20/1003.md?p=17) may increase the aggregate insurable limit applicable to students who are pursuing programs which the [Secretary](/usc/20/1003.md?p=17) determines are exceptionally expensive.
- (b) **Level of insurance coverage based on default rate—**
  - (1) **Reduction for defaults in excess of 5 or 9 percent—**
    - (A) Except as provided in [subparagraph (B)](#b-1-B), the insurance liability on any [loan](/usc/20/1066a.md?p=2) insured by the [Secretary](/usc/20/1003.md?p=17) under this part shall be 100 percent of the unpaid balance of the principal amount of the [loan](/usc/20/1066a.md?p=2) plus [interest](/usc/20/1066a.md?p=6), except that—
      - (i) if, for any fiscal year, the total amount of payments under [section 1080 of this title](/usc/20/1080.md) by the [Secretary](/usc/20/1003.md?p=17) to any [eligible lender](/usc/20/1019.md?p=4) as described in [section 1085(d)(1)(D) of this title](/usc/20/1085.md?p=d-1-D) exceeds 5 percent of the sum of the [loans](/usc/20/1066a.md?p=2) made by such [lender](/usc/20/1019.md?p=6) which are insured by the [Secretary](/usc/20/1003.md?p=17) and which were in repayment at the end of the preceding fiscal year, the insurance liability under this subsection for that portion of such excess which represents [loans](/usc/20/1066a.md?p=2) insured after the applicable date with respect to such [loans](/usc/20/1066a.md?p=2), as determined under [subparagraph (C)](#b-1-C), shall be equal to 90 percent of the amount of such portion; or
      - (ii) if, for any fiscal year, the total amount of such payments to such a [lender](/usc/20/1019.md?p=6) exceeds 9 percent of such sum, the insurance liability under this subsection for that portion of such excess which represents [loans](/usc/20/1066a.md?p=2) insured after the applicable date with respect to such [loans](/usc/20/1066a.md?p=2), as determined under [subparagraph (C)](#b-1-C), shall be equal to 80 percent of the amount of such portion.
    - (B) Notwithstanding [subparagraph (A)](#b-1-A), the provisions of clauses [(i)](#b-1-A-i) and [(ii)](#b-1-A-ii) of such subparagraph shall not apply to an [eligible lender](/usc/20/1019.md?p=4) as described in [section 1085(d)(1)(D) of this title](/usc/20/1085.md?p=d-1-D) for the fiscal year in which such [lender](/usc/20/1019.md?p=6) begins to carry on a [loan](/usc/20/1066a.md?p=2) program insured by the [Secretary](/usc/20/1003.md?p=17), or for any of the 4 succeeding fiscal years.
    - (C) The applicable date with respect to a [loan](/usc/20/1066a.md?p=2) made by an [eligible lender](/usc/20/1019.md?p=4) as described in [section 1085(d)(1)(D) of this title](/usc/20/1085.md?p=d-1-D) shall be—
      - (i) the 90th day after the adjournment of the next regular session of the appropriate [State](/usc/20/1003.md?p=21-A) legislature which convenes after October 12, 1976, or
      - (ii) if the primary source of lending capital for such [lender](/usc/20/1019.md?p=6) is derived from the sale of bonds, and the constitution of the appropriate [State](/usc/20/1003.md?p=21-A) prohibits a pledge of such [State](/usc/20/1003.md?p=21-A)’s credit as security against such bonds, the day which is one year after such 90th day.
  - (2) **Computation of amounts in repayment—** For the purpose of this subsection, the sum of the [loans](/usc/20/1066a.md?p=2) made by a [lender](/usc/20/1019.md?p=6) which are insured by the [Secretary](/usc/20/1003.md?p=17) and which are in repayment shall be the original principal amount of [loans](/usc/20/1066a.md?p=2) made by such [lender](/usc/20/1019.md?p=6) which are insured by the [Secretary](/usc/20/1003.md?p=17) reduced by—
    - (A) the amount the [Secretary](/usc/20/1003.md?p=17) has been required to pay to discharge his or her insurance obligations under this part;
    - (B) the original principal amount of [loans](/usc/20/1066a.md?p=2) insured by the [Secretary](/usc/20/1003.md?p=17) which have been fully repaid;
    - (C) the original principal amount insured on those [loans](/usc/20/1066a.md?p=2) for which payment of first installment of principal has not become due pursuant to [section 1077(a)(2)(B) of this title](/usc/20/1077.md?p=a-2-B) or such first installment need not be paid pursuant to [section 1077(a)(2)(C) of this title](/usc/20/1077.md?p=a-2-C); and
    - (D) the original principal amount of [loans](/usc/20/1066a.md?p=2) repaid by the [Secretary](/usc/20/1003.md?p=17) under [section 1087 of this title](/usc/20/1087.md).
  - (3) **Payments to assignees—** For the purpose of this subsection, payments by the [Secretary](/usc/20/1003.md?p=17) under [section 1080 of this title](/usc/20/1080.md) to an assignee of the [lender](/usc/20/1019.md?p=6) with respect to a [loan](/usc/20/1066a.md?p=2) shall be deemed payments made to such [lender](/usc/20/1019.md?p=6).
  - (4) **Pledge of full faith and credit—** The full faith and credit of the United States is pledged to the payment of all amounts which may be required to be paid under the provisions of section [1080](/usc/20/1080.md) or [1087](/usc/20/1087.md) of this title.

## Footnotes

[^1]: See References in Text note below.
[^2]: So in original. There is no opening parenthesis.

## Source credit

(Pub. L. 89–329, title IV, § 425, as added Pub. L. 99–498, title IV, § 402(a), Oct. 17, 1986, 100 Stat. 1359; amended Pub. L. 100–50, § 10(a), June 3, 1987, 101 Stat. 341; Pub. L. 102–325, title IV, § 413, July 23, 1992, 106 Stat. 512; Pub. L. 103–208, § 2(c)(2), (3), Dec. 20, 1993, 107 Stat. 2460, 2461; Pub. L. 105–244, title IV, § 415, Oct. 7, 1998, 112 Stat. 1679; Pub. L. 109–171, title VIII, § 8005(a), Feb. 8, 2006, 120 Stat. 158.)

## Notes

### Editorial Notes

### References in Text

Section 1078–1 of this title, referred to in subsec. (a)(2)(A), was repealed by Pub. L. 103–66, title IV, § 4047(b)–(d), Aug. 10, 1993, 107 Stat. 364, eff. July 1, 1994, except with respect to loans provided under that section as it existed prior to Aug. 10, 1993. Subsequently, a new section 1078–1, relating to voluntary flexible agreements with guaranty agencies, was enacted by Pub. L. 105–244, title IV, § 418, Oct. 7, 1998, 112 Stat. 1691.

### Prior Provisions

A prior section 1075, Pub. L. 89–329, title IV, § 425, Nov. 8, 1965, 79 Stat. 1238; Pub. L. 90–575, title I, §§ 116(b)(1), 120(a)(2), Oct. 16, 1968, 82 Stat. 1023, 1027; Pub. L. 92–318, title I, §§ 132A(a), 132B(a), June 23, 1972, 86 Stat. 261, 262; Pub. L. 94–482, title I, § 127(a), Oct. 12, 1976, 90 Stat. 2104; Pub. L. 95–43, § 1(a)(15)–(17), June 15, 1977, 91 Stat. 214; Pub. L. 95–566, § 5(b)(2), Nov. 1, 1978, 92 Stat. 2403; Pub. L. 96–374, title IV, § 412(a), (b), (f), title XIII, § 1391(a)(1), Oct. 3, 1980, 94 Stat. 1416, 1417, 1503; Pub. L. 97–35, title V, § 535(a), (b), Aug. 13, 1981, 95 Stat. 455; Pub. L. 99–272, title XVI, § 16013(e)(1), Apr. 7, 1986, 100 Stat. 341, limited Federal loan insurance, prior to the general revision of this part by Pub. L. 99–498.

### Amendments

2006—Subsec. (a)(1)(A)(i)(I). Pub. L. 109–171, § 8005(a)(1), substituted “$3,500” for “$2,625”.

Subsec. (a)(1)(A)(ii)(I). Pub. L. 109–171, § 8005(a)(2), substituted “$4,500” for “$3,500”.

1998—Subsec. (a)(1)(A)(i)(I). Pub. L. 105–244, § 415(1)(A), inserted “and” after semicolon.

Subsec. (a)(1)(A)(i)(II), (III). Pub. L. 105–244, § 415(1)(B), added subcl. (II) and struck out former subcls. (II) and (III) which read as follows:

“(II) $1,750, if such student is enrolled in a program whose length is less than one academic year, but at least ⅔ of such an academic year; and

“(III) $875, if such student is enrolled in a program whose length is less than ⅔, but at least ⅓, of such an academic year;”.

Subsec. (a)(1)(A)(iii)(II). Pub. L. 105–244, § 415(2), inserted “and” after semicolon at end.

1993—Subsec. (a)(1)(A)(ii), (iii). Pub. L. 103–208, § 2(c)(2)(A), added cls. (ii) and (iii) and struck out former cls. (ii) and (iii) which read as follows:

“(ii) the case of a student who has successfully completed such first year but has not successfully completed the remainder of a program of undergraduate study—

“(I) $3,500, if such student is enrolled in a program whose length is at least one academic year in length (as determined under section 1088 of this title);

“(II) $2,325, if such student is enrolled in a program whose length is less than one academic year, but at least ⅔ of such an academic year; and

“(III) $1,175, if such student is enrolled in a program whose length is less than ⅔, but at least ⅓, of such an academic year;

“(iii) in the case of a student at an eligible institution who has successfully completed such first and second year but has not successfully completed the remainder of a program of undergraduate study—

“(I) $5,500, if such student is enrolled in a program whose length is at least one academic year in length (as determined under section 1088 of this title);

“(II) $3,675, if such student is enrolled in a program whose length is less than one academic year, but at least ⅔ of such an academic year; and

“(III) $1,825, if such student is enrolled in a program whose length is less than ⅔, but at least ⅓, of such an academic year; and”.

Subsec. (a)(1)(A)(iv). Pub. L. 103–208, § 2(c)(2)(B), substituted a period for semicolon at end.

Subsec. (a)(1)(C). Pub. L. 103–208, § 2(c)(3), added subpar. (C).

1992—Subsec. (a)(1)(A). Pub. L. 102–325, § 413(1), added cls. (i) to (iv) and struck out former cls. (i) to (iii) which read as follows:

“(i) $2,625, in the case of a student who has not successfully completed the first and second year of a program of undergraduate education;

“(ii) $4,000, in the case of a student who has successfully completed such first and second year but who has not successfully completed the remainder of a program of undergraduate education; or

“(iii) $7,500, in the case of a graduate or professional student (as defined in regulations of the Secretary).”

Subsec. (a)(2)(A). Pub. L. 102–325, § 413(2), added cls. (i) and (ii) and concluding provision and struck out former cls. (i) and (ii) which read as follows:

“(i) $17,250, in the case of any student who has not successfully completed a program of undergraduate education, excluding loans made under section 1078–1 or 1078–2 of this title; and

“(ii) $54,750, in the case of any graduate or professional student (as defined by regulations of the Secretary and including any loans which are insured by the Secretary under this part, or by a guaranty agency, made to such person before he or she became a graduate or professional student), excluding loans made under section 1078–1 or 1078–2 of this title.”

1987—Subsec. (a)(2)(A)(i). Pub. L. 100–50, § 10(a)(1), inserted “, excluding loans made under section 1078–1 or 1078–2 of this title” after “undergraduate education”.

Subsec. (a)(2)(A)(ii). Pub. L. 100–50, § 10(a)(2), inserted “, excluding loans made under section 1078–1 or 1078–2 of this title” after “graduate or professional student)”.

### Statutory Notes and Related Subsidiaries

### Effective Date of 2006 Amendment

Pub. L. 109–171, title VIII, § 8005(e), Feb. 8, 2006, 120 Stat. 159, provided that: “The amendments made by subsections (a), (b), and (d) [amending this section and sections 1078 and 1078–8 of this title] shall be effective July 1, 2007.”

### Effective Date of 1998 Amendment

Amendment by Pub. L. 105–244 effective Oct. 1, 1998, except as otherwise provided in Pub. L. 105–244, see section 3 of Pub. L. 105–244, set out as a note under section 1001 of this title.

### Effective Date of 1993 Amendment

Amendment by section 2(c)(2) of Pub. L. 103–208 effective on and after July 1, 1994 and amendment by section 2(c)(3) of Pub. L. 103–208 effective on and after Dec. 20, 1993, see section 5(b)(2), (6) of Pub. L. 103–208 set out as a note under section 1051 of this title.

### Effective Date of 1992 Amendment

Amendment by Pub. L. 102–325 effective July 23, 1992, with changes made in subsec. (a), relating to annual and aggregate loan limits, applicable with respect to loans for which first disbursement is made on or after July 1, 1993, except that changes made in subsec. (a)(1)(A)(i) applicable with respect to loans for which first disbursement is made on or after Oct. 1, 1992, and except that changes made in subsec. (a)(1)(A)(iv) applicable with respect to loans to cover costs of instruction for periods of enrollment beginning on or after Oct. 1, 1993, see section 432 of Pub. L. 102–325, set out as a note under section 1078 of this title.

### Effective Date of 1987 Amendment

Amendment by Pub. L. 100–50 effective as if enacted as part of the Higher Education Amendments of 1986, Pub. L. 99–498, see section 27 of Pub. L. 100–50, set out as a note under section 1001 of this title.

### Effective Date

Section effective Oct. 17, 1986, except that subsec. (a) of this section applicable only to loans disbursed on or after Jan. 1, 1987, or made to cover the costs of instruction for periods of enrollment beginning on or after Jan. 1, 1987, see section 402(b) of Pub. L. 99–498, set out as a note under section 1071 of this title.