How Much Student Debt Can I Afford? Answer 5 Questions to Find Out

 July 10, 2020
How Student Loan Hero Gets Paid

How Student Loan Hero Gets Paid

Student Loan Hero is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). Student Loan Hero does not include all lenders, savings products, or loan options available in the marketplace.

Advertiser Disclosure

Student Loan Hero Advertiser Disclosure

Student Loan Hero is an advertising-supported comparison service. The site features products from our partners as well as institutions which are not advertising partners. While we make an effort to include the best deals available to the general public, we make no warranty that such information represents all available products.

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It may not have been reviewed, commissioned or otherwise endorsed by any of our network partners.

take out student loans

We’ve got your back! Student Loan Hero is a completely free website 100% focused on helping student loan borrowers get the answers they need. Read more

How do we make money? It’s actually pretty simple. If you choose to check out and become a customer of any of the loan providers featured on our site, we get compensated for sending you their way. This helps pay for our amazing staff of writers (many of which are paying back student loans of their own!).

Bottom line: We’re here for you. So please learn all you can, email us with any questions, and feel free to visit or not visit any of the loan providers on our site. Read less

Note that the government has paused all repayment on federally held student loans through the end of 2022, with no interest to be charged during that period and no loans to be held delinquent or in default.

*          *          *

If you’re wondering how much in student loans you can afford, you’re asking the right question. Borrowing only what you must — and can realistically repay — will save you a lot of heartache.

To figure out how much in student loans to borrow, ask yourself the following five questions relating to your financial situation, choice of college and major, as well as postgraduate goals.

1. How much will I need to borrow?
2. What will my student loan payments be?
3. How much can I expect to make after college?
4. What are my life, career and financial goals?
5. Can I change my plans to pay off student loans faster?

1. How much will I need to borrow?

A big factor that could affect your student loan balance is the college you choose to attend. As you’re considering colleges, it’s helpful to estimate how much debt you’d have to take on to attend each one. To do so, follow these steps:

  • Find the annual college costs you’ll face, including tuition and fees as well as room and board, textbooks and more. You can use your school’s net price calculator, which each college and university is required by law to share. If you can’t find it online, ask your financial aid office.
  • Subtract any gift aid you’ll receive, such as college grants or scholarships, from the total cost. This will reveal your college net price, which is the actual out-of-pocket cost you and your family must pay.
  • Consider your savings and cash. Think through how much of your net price you can afford to pay for out of college savings, earnings from a part-time job or other funds.

The result you come to is how much you’ll borrow each school year. You’ll need to multiply the amount by the total number of years it’ll take to complete your degree.

Run the numbers…

Say your school’s net cost is $15,000 after accounting for gift aid, and your family could stomach an out-of-pocket payment of $10,000. Your annual shortfall would be $5,000, or $20,000 for a four-year degree — give or take some dollars and cents depending on how your gift aid and financial flexibility shift year to year.

2. What will my student loan payments be?

Once you know how much you’ll need to borrow, estimate what your monthly dues will be after you graduate. The easiest way to do so is by using a student loan payment calculator.

Run the numbers…

Say you’re considering a $5,000 direct unsubsidized student loan as a freshman, and you’d be borrowing it at the 2.75% interest rate awarded for the 2020-2021 school year. Repaying it on the 10-year, standard repayment plan would leave you with $48 monthly payments (assuming you decide to make in-school payments and not counting future borrowing).

Planning to borrow more or less or at different rates? Plug your potential loan into our calculator:

Student Loan Payment Calculator

Total interest paid

Monthly payment

Total amount paid

Total interest paid
Monthly payment
Total amount paid

This will tell you what the student debt you take on now may look like once you have to repay it. How financially burdensome will this debt be? Will the monthly payment lead to student debt burnout?

To know for sure, you might need to think through other factors affecting your post-college life.

3. How much can I expect to make after college?

Whether your student debt is affordable after graduation depends on how much money you make. No one knows what the future holds, but you can do your own research and estimate how much you’ll make after college:

  • Check your college’s website or ask its financial aid office for employment outcomes and average starting salaries of recent graduates.
  • Look up post-graduation salaries for your college with the Department of Education’s College Scorecard.
  • Estimate your salary based on your major, gender and age with this interactive income tool from The Hamilton Project.

Run the numbers…

As a general rule, student loan payments should be less than or equal to 8% of your monthly income to be considered affordable. If the tools above lead you to estimate your postgraduate salary at $50,000, for example, you should borrow no more than $34,936.56 at that low, federal loan interest rate of 2.75%, according to Mapping Your Future.

Of course, student loan borrowing is rarely black and white. If you borrow multiple student loans, you’ll likely have a unique interest rate attached to each one. In that case, take your total borrowing balance, plus an average of your rates and plug those figures into Mapping Your Future’s calculators.

4. What are my life, career and financial goals?

Nearly 8 in 10 college graduates say their student loan debt hinders their ability to achieve personal and financial milestones.

With that in mind, consider more than quantitative facts like your income when you picture your future with education debt. Loan repayment could hold you back from many important goals, such as:

  • Starting a business after college
  • Getting married or taking another major life step
  • Moving to a city with a high cost of living
  • Buying a home
  • Pursuing nonprofit work or other typically low-paying careers
  • Traveling the world or having other enriching experiences

Although it’s possible to do all of the above and more with student debt, there’s no doubt that borrowing less now gives you more financial freedom later. So ask yourself what life plans you have and how student debt will affect them. Is that a trade-off you’re willing to accept?

5. Can I change my plans to pay off student loans faster?

If you’re concerned that your student loan balances might get too high, revisit your college or career plans. Here are some ways you can change your plans now to keep student loans manageable in repayment.

Find more funds for college

If the amount you’ll have to borrow in student loans is too high, it’s time to start searching for ways to cover more of those costs without getting into debt:

Choose a cheaper college

Choosing a less expensive college can make a huge difference in your student debt. Consider cost-saving strategies, such as attending a college that allows you to live rent-free with your parents.

You could even complete your first two years at a community college before transferring to a four-year school. Our study on community college savings found that this strategy saves students $11,377 on average.

Pursue a higher-paying degree

If your current area of study leads to low-income work, consider pursuing an in-demand degree that will lead to a high-paying job instead.

Engineering graduates, for example, earn the highest starting salaries out of college. Those in this major who graduated in 2020 were projected to earn an average salary of $69,961, according to a National Association of Colleges and Employers survey. For comparison, humanities majors from the Class of 2020 were slated to earn $53,617.

Go a step further and consider your major’s ROI, or the return on your investment. After all, some majors call for greater student loan borrowing than others.

Get help from your financial aid office

Don’t forget to reach out to your school’s financial aid office for help. Peruse its online resources, set up an in-person appointment and ask for free advice on paying for college.

You might be directed to answer the question of how much student loan debt you can afford by employing a helpful worksheet like the one published by the Consumer Financial Protection Bureau.

Even when seeking guidance, never forget your own responsibility: to limit your student debt to what you can reasonably afford to repay. Your future financial stability and freedom depend on it.

Andrew Pentis contributed to this report.

Need a student loan?

Here are our top student loan lenders of 2022!
LenderVariable APREligibility 
2.49% – 13.85%1Undergraduate

Visit College Ave

2.55% – 11.44%2Undergraduate

Visit Earnest

3.25% – 13.59%3Undergraduate

Visit SallieMae

0.00% – 23.00%4Undergraduate

Visit Edly

3.25% – 9.69%6Undergraduate



Visit FundingU

* The Sallie Mae partner referenced is not the creditor for these loans and is compensated by Sallie Mae for the referral of Smart Option Student Loan customers.

1 Important Disclosures for College Ave.

CollegeAve Disclosures

College Ave Student Loans products are made available through Firstrust Bank, member FDIC, First Citizens Community Bank, member FDIC, or M.Y. Safra Bank, FSB, member FDIC.. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.

  1. As certified by your school and less any other financial aid you might receive. Minimum $1,000.
  2. Rates shown are for the College Ave Undergraduate Loan product and include autopay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. Variable rates may increase after consummation.
  3. This informational repayment example uses typical loan terms for a freshman borrower who selects the Deferred Repayment Option with a 10-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 8.35% fixed Annual Percentage Rate (“APR”): 120 monthly payments of $179.18 while in the repayment period, for a total amount of payments of $21,501.54. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.

Information advertised valid as of 9/15/2022. Variable interest rates may increase after consummation. Approved interest rate will depend on the creditworthiness of the applicant(s), lowest advertised rates only available to the most creditworthy applicants and require selection of full principal and interest payments with the shortest available loan term.

2 Rate range above includes optional 0.25% Auto Pay discount. Important Disclosures for Earnest.

Earnest Disclosures

Actual rate and available repayment terms will vary based on your income. Fixed rates range from 3.47% APR to 13.03% APR (excludes 0.25% Auto Pay discount). Variable rates range from 2.80% APR to 11.69% APR (excludes 0.25% Auto Pay discount). Earnest variable interest rate student loan refinance loans are based on a publicly available index, the 30-day Average Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of New York. The variable rate is based on the rate published on the 25th day, or the next business day, of the preceding calendar month, rounded to the nearest hundredth of a percent. The rate will not increase more than once per month. Although the rate will vary after you are approved, it will never exceed 36% (the maximum allowable for this loan). Please note, Earnest Private Student Loans are not available in Nevada. Our lowest rates are only available for our most credit qualified borrowers and contain our .25% auto pay discount from a checking or savings account. It is important to note that the 0.25% Auto Pay discount is not available while loan payments are deferred.

3 Sallie Mae Disclaimer: Click here for important information. Terms, conditions and limitations apply.

4 Important Disclosures for Edly.

Edly Disclosures

1. Loan Example:

  • Loans from $5,000 – $20,000
  • Example: $10,000 IBR Loan with a 7% gross income payment percentage for a Senior student making $65,000 annually throughout the life of the loan.
    • Payments deferred for the first 12 months during final year of education.
    • After which, $270 Monthly payment for 12 months.
    • Then $379 Monthly payment for 44 months.
    • Followed by one final payment of $137 for a total of $20,610 paid over the life of the loan.

About this example

The initial payment schedule is set upon receiving final terms and upon confirmation by your school of the loan amount. You may repay this loan at any time by paying an effective APR of 23%. The maximum amount you will pay is $22,500 (not including Late Fees and Returned Check Fees, if any). The maximum number of regularly scheduled payments you will make is 60. You will not pay more than 23% APR. No payment is required if your gross earned income is below $30,000 annually or if you lose your job and cannot find employment.

2. Edly Student IBR Loans are unsecured personal student loans issued by FinWise Bank, a Utah chartered commercial bank, member FDIC. All loans are subject to eligibility criteria and review of creditworthiness and history. Terms and conditions apply.

5 Important Disclosures for Citizens Bank.

Citizens Bank Disclosures

  • Variable Rate Disclosure: Variable interest rates are based on the 30-day average Secured Overnight Financing Rate (“SOFR”) index, as published by the Federal Reserve Bank of New York. As of September 1, 2022, the 30-day average SOFR index is 2.23%. Variable interest rates will fluctuate over the term of the loan with changes in the SOFR index, and will vary based on applicable terms, level of degree and presence of a co-signer. The maximum variable interest rate is the greater of 21.00% or the prime rate plus 9.00%.
  • Fixed Rate Disclosure: Fixed rate ranges are based on applicable terms, level of degree, and presence of a co-signer.
  • Lowest Rate Disclosure: Lowest rates are only available for the most creditworthy applicants, require a 5-year repayment term, immediate repayment, a graduate or medical degree (where applicable), and include our Loyalty and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Rates are subject to additional terms and conditions, and are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.


    Undergraduate Rate Disclosure: Variable interest rates range from 3.25%-10.35% (3.25% – 9.69% APR). Fixed interest rates range from 4.24% – 10.59% (4.24% – 9.93% APR). 

    Graduate Rate Disclosure: Variable interest rates range from 3.75%-9.90% (3.75% – 9.68% APR). Fixed interest rates range from  5.22% – 10.14% (5.22% – 9.91% APR). 

    Business/Law Rate Disclosure: Variable interest rates range from 3.75%-9.35% (3.75% – 9.16% APR). Fixed interest rates range from 5.20% – 9.59% (5.20% – 9.39% APR).

    Medical/Dental Rate Disclosure: Variable interest rates range from 3.75%-9.02% (3.75% -8.98% APR). Fixed interest rates range from 5.18% – 9.26% (5.18% – 9.22% APR). 

    Parent Loan Rate Disclosure: Variable interest rates range from 3.25%-9.21% (3.25% – 9.21% APR). Fixed interest rates range from 3.96%-9.50% (3.96%-9.50% APR).

    Bar Study Rate Disclosure: Variable interest rates range from 6.58%-11.72% (6.58% – 11.62% APR). Fixed interest rates range from 7.39% – 12.94% (7.40% – 12.82% APR). 

    Medical Residency Rate Disclosure: Variable interest rates range from 5.67%-9.17% (5.67% – 8.76% APR). Fixed interest rates range from 6.99% – 10.49% (6.97% – 10.08% APR).

6 Important Disclosures for Funding U.

Funding U Disclosures

Offered terms are subject to change. Loans are made by Funding University which is a for-profit enterprise. Funding University is not affiliated with the school you are attending or any other learning institution. None of the information contained in Funding University’s website constitutes a recommendation, solicitation or offer by Funding University or its affiliates to buy or sell any securities or other financial instruments or other assets or provide any investment advice or service.