How much student debt is too much?

Whether you are a high school student preparing to go to college or a career professional considering returning to school for a different degree, student debt can be overwhelming. There are mixed theories regarding student debt loads. Some people believe it is okay to take out as much as required to pay for tuition and others don’t want to take out a loan at all, and likely will end up settling for less education.

The best solution lies somewhere in the middle.

The first step to picking a college is deciding on a career. If you are still in high school, you can connect with your high school counselor and attend career days to see what type of profession you may want to pursue. Once you have decided on a potential profession, it’s important to look at the average starting salary for that profession.

As a general guideline, you should avoid taking student loans greater than your career choice’s first-year salary. For example, if you can graduate and make $40,000 a year at the new job, it is reasonable to take out $40,000 for your student loan. Of course, the goal is to pay as little as possible, so getting grants and scholarships can lower the overall cost of your education. 

It is important to note that when people apply for student loans, the approval is based on the family income, not what one can afford. (You may also have the benefit of receiving a contribution from your parents or relatives!!)  

When it comes to student loan debt, it’s tempting to take out as much as possible- however, keepin mind that if you can’t afford the payments now, you will likely not be able to afford them right away once school is complete. Consider your budget carefully. Interest rates can be high once deferred repayment comes due on a student loan.

Interest rates can be high once the deferred repayment comes due. After college, there is no guarantee of stable or excess income. Take the time to research realistic salary expectations for the career that you’re pursuing (with a potentially expensive education.)  

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