How Much Can I Afford To Borrow?  

Estimate your expected starting salary for an entry level position in your career path and project your monthly payments for your level of debt to see if the amount you are trying to borrow is realistic. Develop a financial plan for the total cost of obtaining your college degree. If you can’t afford your anticipated payments, then think about borrowing a smaller amount. Look for other sources of aid, such as scholarships and grants, to help meet expenses. You should reevaluate your future income and expenses each time you consider obtaining a student loan.  

Steps for Determining an Affordable Level of Borrowing:

1. Research your anticipated entry level earnings.

You can research your anticipated starting salary at the US Department of Labor, using the US Department of Labor Outlook handbook at or you can use the chart found here.

2. Get an idea of what your interest rate will be in repayment.

You can determine the interest rate on you Federal Stafford loans here.

3. Calculate your maximum manageable debt level.

A good general rule for a sound budget is that your monthly student loan debt should not exceed 10% of your monthly projected gross salary. 

Use the following formula to determine if your anticipated entry-level salary will be sufficient to pay back your projected education loan indebtedness:  

Multiply your monthly student loan debt by 12 to get your total annual student loan payments. Divide the annual total by .10. This result is the annual income required to repay the amount you borrowed. 

You can also use the chart found here to help you estimate your monthly payments and the corresponding annual income that is required to repay your Stafford loans.

4. Determine your outstanding Stafford Loan balance on the
  National Student Loan Data System.

A student can determine their total outstanding Federal loan balance by accessing the information provided by The National Student Loan Data System (NSLDS) at

5. Calculate your monthly student loan payment.

Repayment Calculator - You can calculate your monthly student loan debt using the student loan calculator at the website at 

You can use the chart found hereto estimate how a longer repayment period will affect the monthly payment and the interest that you pay.



6. Create an In-School budget.

Creating an In-School Budget will help you estimate your education and living expenses while in school.

7. Create an After-Graduation budget.

Estimating an After-Graduation Budget will help you determine how much you can realistically afford to borrow in student loans.


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