The cost of attending college is unaffordable for the majority of college students. According to U.S. News data on student loan debt, 64% of 2021 college graduates took out student loans to help pay for educational expenses, with an average balance of $29,719 for a bachelor’s degree.

But if you’re an incoming or current college student, figuring out how much to borrow based on averages can get you in trouble – or, at the very least, make your life difficult for the first several years of your career. Here are some ways to figure out how much student loan debt is too much for your situation.

An Imperfect Rule of Thumb

Every situation is different, so it’s difficult to provide a one-size-fits-all answer to the question of how much student loan debt is too much.

One rule of thumb some experts recommend is to avoid borrowing more than your post-graduation starting salary. If you know what you want your career path to be, you can use the U.S. Bureau of Labor Statistics Occupational Employment and Wage Statistics database to get an idea of what you can expect.

But like all rules of thumb, this approach is just a starting point to determine how much debt is too much for you.

You May Not Know What You Want

“When we met with 18-year-olds and asked them about this, they laughed in our faces,” says Nancy Goodman, founder of College Money Matters, a nonprofit that provides resources to help students and their families make informed decisions about paying for college. “Many don’t know what they want to be when they grow up.”

Even if you do know what you want, that still doesn’t mean it’s set in stone. “The job market might change, or your interests may shift to another field,” says Jay Fleischman, a student loan lawyer at MoneyWise Law.

The Future Is Uncertain

There’s no guarantee that you’ll land the job you want, and even if you do, monthly payments can still feel oppressive if your debt burden matches your salary.

For example, let’s say your first job out of college offers $30,000, and you borrow that same amount at an average interest rate of 4% – the average of federal student loan interest rates over the last four years. On the standard 10-year repayment plan, that gives you a monthly payment of about $304.

That comes to about 12% of your gross income of $2,500 per month. But with federal and state taxes, your monthly take-home pay may be closer to $2,100 if you’re single – leaving you with about $1,800 per month for rent, utilities, groceries and other living expenses. Depending on where you choose to live, your student loan debt could leave you living paycheck to paycheck or worse.

“One shouldn’t borrow based on an uncertain future expectation,” says Fadl Al Tarzi, CEO of Nexford University, an online school. “Also, the pressure of having to pay back loans can impact one’s career trajectory. Graduates are pressured to accept certain roles, and even pursue certain career paths, out of pressure to pay back their loans.”

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What to Consider as You Determine How Much to Borrow

It’s impossible to nail down an exact figure for all college students, and basing your number on an uncertain future may not be the best approach. If you’re planning to attend medical or law school, your idea of how much to borrow will be different compared with someone who wants to become a teacher or social worker.

However, the following factors can help you determine the right amount for you:

Delinquency and Default Rates

Student loan borrowers who are 90 days behind on their payments or have defaulted have a median balance of just $15,307, according to the Federal Reserve Bank of New York. With a 4% interest rate and a 10-year repayment term, that’s a monthly payment of $155.

Of course, the data doesn’t include average salaries for delinquent and defaulted borrowers, so using the median default balance as a rule of thumb isn’t perfect either. But it’s important to understand that even half the average student loan burden can potentially wreak havoc on your financial health and make it difficult to get by.

While you may not take out student loans with the expectation of defaulting, it’s important to be mindful of how the student loans you take out today might impact you in the future.

Income-Driven Repayment Plans

If you have federal student loans, you may have access to one or more of the four income-driven repayment plans.

These plans reduce your monthly payment to 10% to 20% of your discretionary income and extend your repayment term to 20 or 25 years. If you still have a balance when your term ends, it’ll be forgiven.

Income-driven repayment plans can make student loan debt – even larger balances – more affordable. But it’s important to note that you’ll be required to recertify your income every year, so your monthly payments will grow over time with your salary.

What’s more, many student loan borrowers see their student loan balances grow on income-driven repayment plans because their payment isn’t high enough to cover the accruing interest. “With the exception of those situations where debt is forgiven, most of these payment modifications just make the student or parent owe more because interest keeps accumulating,” says Goodman.

If this happens and you lose your eligibility for the plan or your monthly payment increases to the point where you pay off the debt before receiving forgiveness, you may end up paying a lot more than you originally intended.

“It’s still important to focus on the total debt burden because, even if your monthly payments are lower, you’ll be paying more overall and for a longer period of time,” says Fleischman. “The best approach is to aim to limit your total student loan debt as much as possible and only borrow what you need.”

Availability of Other Financial Aid

Some college students may rely on federal student loans primarily because they’re easy to obtain. There are other forms of financial aid available to you to help you limit your reliance on debt. In other words, take the time to research all of your options to pay for college and consider student loans as a last resort. Options include:

  • Scholarships. Many colleges and universities offer both merit- and need-based scholarships. Check with your school’s financial aid office to see what’s available and whether you qualify. You can also search scholarship databases such as and Fastweb for opportunities from private organizations.
  • Grants. The federal government offers grants to college students, typically based on financial need. Make sure you fill out the Free Application for Federal Student Aid to see if you qualify.
  • Assistantships and fellowships. If you’re attending graduate school, you may qualify for an assistantship or fellowship. The two opportunities are different, but both typically offer money in exchange for work or advanced study in your field. 

You may also consider working part or full time during the summer or even while you’re in school. Depending on your situation, you could also opt for a less expensive school.

“Students should think about how much they are about to invest and try to forecast how long it would take them to recoup that investment,” says Al Tarzi. “By thinking about education as an investment, students will inevitably make different choices on where they choose to study.”

Do the Math Before You Borrow

Before you take out a student loan, review the terms and run the numbers to understand what it’ll cost you. Using an online loan calculator, you can get an idea of what your monthly payment will be and how much interest you’ll ultimately pay if you stick to the original repayment term.

Even if you think you can handle more debt, research opportunities to pay for school without needing to borrow money. “Everyone benefits by having less debt, both for future purchases, better credit ratings and breathing room for savings and emergencies,” says Goodman.

With rules of thumb as your guide, research your career path and other ways to pay for school to determine the right amount of student loan debt for you.

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