Care should be exercised when deciding how much you borrow each year. Students who are borrowing the maximum Federal subsdized Direct loan each year will have a MINIMUM of $17,125 in loan debt. after four years of college. Additional UNSUBSIDIZED loans can add to this debt.
Make sure you understand the total cost involved in borrowing student loans and the impact the choices you make now will have on your life after graduation. Ideally, you want your monthly student loan payments to be less that 8% of your monthly income after you graduate. Student loan payments between 8% and 10% of income are considered average these days. However, depending on your starting salary, this amount of debt could be a burden.
There are a number of online calculators that will help you understand how much you will ultimately have to pay when you borrow under these loan programs. Check these sites for more information:
- FinAid! The Smart Student Guide to Financial Aid's Loan Calculator
- CNNMoney.com's Student Loan Calculator
How Much Will You Save if You Utilize a Monthly Payment Plan in Combination with Borrowing?
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Based on academic major and repayment period, these calculators determine the average annual starting salary for the field and give the maximum manageable debt load and maximum manageable monthly payment.
For More Information
- Loan Repayment Options - Undergraduate Students
- Loan Repayment Options - Graduate and Professional Students
Updated July 24, 2013