Student Loans: How Much is Too Much?

Think about the first 10 years after college graduation. You may want to purchase a reliable vehicle, rent an apartment, purchase a home, travel, get married, have children, etc.  You have worked hard to obtain your degree and land a good-paying job in an effort to provide for your future, yet too much student debt can inhibit your ability to afford the things or adventures you want.

About three-fourths of college students (4-year) graduate with loan debt.  According to the Institute for College Access & Success, the average Wisconsin graduate leaves college with $30,059 in student loan debt.  Although the total borrowed amount is a personal decision, there is a general ‘rule of thumb’ as to the amount of debt a college student should acquire.  Total student debt upon graduation should be less than your future annual income.  For example, if your estimated starting salary is $40,000, your total student debt should be less than $40,000.  Upon graduation, there is usually a 6 month grace period, but then you will have a student loan payment for the next 10+ years.  This monthly debt payment will reduce the amount of money available to pay for expenses of your choosing.

Remember, education debt is good debt.  Taking on student loans is an investment in your future; however, too much of a good thing can hurt you.  You do not want to spend a lifetime paying off your bachelor’s degree.  Do your research, and make good financial choices now to benefit your future.


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