How much should college students take out in student loans?

Experian explains that borrowing for student loans is a personal decision based on a student's situation, needs and opportunities.


A college student seemingly calculating bills holding a phone with one hand and holding a paper bill with the other.

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Paying for college without student loans is impossible for many students and their parents. According to the College Board, 51% of bachelor's degree recipients graduated with student loan debt in 2022.

Student loan borrowers carry an average of $38,787 in debt, according to a recent U.S. consumer debt study based on Experian data, and for many Americans, their educational debt is a significant financial burden. As a result, it's important for students and parents to understand how much is too much.

How Much Should I Take Out in Student Loans?

Some financial experts offer rules of thumb to help college students determine a target amount of student loan debt. The Consumer Financial Protection Bureau, for instance, recommends that students borrow no more than their expected first-year salary after graduation. 

But while this and other financial rules of thumb can be great starting points, they aren't perfect. For example, pegging your student loan debt to your expected first-year salary can be challenging if you don't yet have concrete career plans. Even if you know what you want to do and have researched expected salary details, there's no guarantee you'll get the results you're hoping for. 

Factors to Consider When Determining How Much to Borrow

Whether you're an incoming freshman or a senior, there are a few factors to consider when evaluating how much student loan debt to take on: 

  • Cost of attendance: Your school should provide you with specifics on its website on how much you can expect to pay each year to attend. Some colleges may even break down those numbers for students living on and off campus. 
  • Gift aid: After filling out the Free Application for Federal Student Aid (FAFSA), you'll receive a financial aid award letter detailing how much aid you qualify for. Focus on the gift aid, including grants and scholarships, which you don't have to repay. The difference between the cost of attendance and the gift aid you expect to receive is what you're expected to cover. 
  • Other sources: Your financial aid award letter will also tell you how much you can borrow in federal student loans for the academic term. However, before you accept any loans, consider other sources you can reasonably expect to help with your expenses, such as educational savings or income from a part-time job or work-study program. 

Risks of Borrowing Excess Student Loans

The federal government offers college students easy access to a large amount of debt. Eligible undergraduate students can borrow as much as $57,500 with no credit check or income requirements, making it easy to overextend yourself.

Some of the risks associated with taking on too much student loan debt include: 

  • Budget pressure: The average student loan payment is $203, according to Experian data. However, yours may be much higher, especially if you overborrow and aren't on an income-driven repayment plan. A high student loan payment can put undue pressure on your budget, making it difficult to meet your basic needs. 
  • Delayed financial goals: A high student loan payment can also limit your financial mobility. In fact, many borrowers say that their student loan debt has caused them to delay major financial and life decisions, such as purchasing a home or car, saving for retirement, getting married or starting a family. 
  • Potential credit damage: Missing a federal student loan payment by 90 days because you can't afford it can damage your credit score—for private student loans, the time frame is just 30 days. If you ultimately default on your student debt, it could severely cripple your credit profile and overall financial well-being for several years to come. 
  • Longer repayment: Federal income-driven repayment plans can help you keep your monthly payments low, but they can extend your repayment term to up to 25 years. What's more, it's possible for your loan balance to grow over time on most income-driven repayment plans if your payment isn't enough to cover accruing interest. 

Keep in mind that if you've already graduated, there may be relief options available to you. Look into federal student loan forgiveness programs and employer repayment assistance programs to determine whether you qualify for help. 

How to Avoid Too Much Student Loan Debt

While student loans can provide much-needed financial aid for college students, it's crucial that you take steps to avoid borrowing more than you can comfortably afford to repay. Here are some steps you can take to minimize your reliance on student loan debt or even eliminate it altogether. 

Apply for Private Grants and Scholarships

In addition to the gift aid you may receive from the federal government or your university, look for other opportunities to get financial aid that you don't have to repay. 

Websites like and Fastweb maintain databases of millions of scholarships and grants offered by private organizations. You can typically search and filter opportunities based on your situation and needs. Keep in mind, though, that you may be up against hundreds or even thousands of other students, so apply for as many as you can. 

Get a Job

If your course load allows it, consider taking on a part-time job while you attend school. If you're eligible for the federal work-study program, you'll get an estimate of how much you can earn in your financial aid package. However, that's not a guarantee that you'll actually get a job. 

Take some time to research jobs on and off campus to see if you can find a position that pays well and works with your school schedule. If you don't plan to take classes during the summer, you can up your hours to full time to save up for the upcoming school year. 

Ask Your Parents for Help

Talk to your parents about whether they can provide you with financial assistance. Many parents save up money for several years in a 529 plan or other account to offer some help with educational expenses. 

If your parents are on track with their own financial goals, they may even feel comfortable using their income or other savings to help cover some of your costs. 

Minimize Your Tuition Costs

While it may be tempting to attend a well-known university for the name recognition, you don't have to pay a premium for a quality education. Start by considering schools in your state to ensure you qualify for lower in-state tuition. 

It can even be worth it to attend a community college to get your general education courses out of the way before transferring to a university to complete your degree program. 

Get on a Budget

The cost of tuition and fees are explicit in your school's cost of attendance, but other expenses, including rent, groceries, transportation, books and supplies, are often just estimates, especially if you plan to live off campus. 

What's more, student loans don't necessarily cover all of your living expenses while you're in school—things like entertainment, clothing, travel and other costs are your responsibility. 

As a result, it's crucial that you create a budget, setting monthly spending goals and tracking your expenses to avoid overspending on your lifestyle. Other ways you can save money include buying or renting used textbooks, borrowing or sharing supplies and taking advantage of student discounts. 

The Bottom Line

Determining how much you should borrow in student loans is a personal decision based on your situation, needs and opportunities. While it may be tempting to accept the full amount of federal student loans you're eligible to receive, consider the long-term risks of overborrowing. 

Depending on your situation, your alternatives to limit your expenses and student loans can vary, so it's important to thoroughly research your options to determine the right path for you.

This story was produced by Experian and reviewed and distributed by Stacker Media.