How Much is Too Much for Taking Out Student Loans?

How much is too much when taking out a student loan and how much should you take then

Flickr user Ervins Strauhmanis

College can be expensive, and that means that many students are forced to take out student loans to cover the costs. However, that also means that someday, they have to repay their loans. Overwhelming student loan debt is a very real fear students and families have. It seems like everyone has a horror story associated with student loans—so how do you avoid it? How much is too much when you’re taking out a student loan? Let’s break it down.

Maximize Financial Aid First

Before you ever consider student loans, maximize your financial aid. That means filing the FAFSA, comparing different schools’ award letters, search and apply for as many outside scholarships as possible, sign up for work study, etc.

The more you earn with this free aid, the less you’ll need to take out with student loans. Unfortunately, many people who end up saddled with student loan debt after graduation didn’t accept all the aid they actually qualified for, either because they didn’t file the FAFSA or didn’t put enough time into scholarships. We can’t emphasize this enough: file the FAFSA! Everyone should, even if you don’t think you’ll qualify for any financial aid. Not only does filing the FAFSA open you up to outside scholarships, it also allows the school to reward you with merit-based scholarships and grants. That’s free money that you’re missing out on if you don’t file the FAFSA. And if you miss out on that, that means taking out a larger student loan.

Federal Loans Before Private Ones

Ideally, you should take out federal loans before considering private loans. Federal loans have more flexible repayment plans and terms, and generally come with more benefits than their private counterparts. Private student loans should be your last resort, after you’ve exhausted all of your other resources.

No origination fees or prepayment penalties

Fixed rates from 3.95% - 8.01% APR with auto-debit

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The “First Year Salary” Rule

A common rule of thumb is to “never take out more than your expected first-year salary.” To determine your potential first-year salary will take a bit of research. If you know which career you’re aiming for after graduation, look up the average starting salary for that position. If you’re uncertain of your career path, go by your major and look up the average salary for someone with your degree type.

No More than $50,000

If you’re unable to determine your first-year salary, another good rule of thumb is to avoid taking more than $50,000 in loans. For the class of 2018, the average starter salary for someone with a bachelor’s degree is just over $50,000. This will, of course, fluctuate by industry and area, but it’s a solid number to go by and still keep student loan repayments manageable.

Remember, get as much financial aid and scholarship money as you can before taking out student loans. Once you graduate college, you’ll have even more bills and necessities that you’re paying for. The less student loan debt you have, the more money you have to save and to support yourself comfortably.

Use College Raptor’s free Student Loan Finder to compare lenders and interest rates side by side!


Lender Rates (APR) Eligibility
Citizens logo.
6.97%-15.03%* Variable
5.99%-14.00%* Fixed
Undergraduate and Graduate
Sallie Mae logo.
6.37% - 16.70% Variable
4.50% - 15.49% Fixed
Undergraduate and Graduate
Credibe company logo.
4.98% - 16.70% Variable
4.07% - 15.66% Fixed
Undergraduate and Graduate
Lendkey company logo.
6.07% - 11.31% Variable
4.39% - 10.39% Fixed
Undergraduate and Graduate
Ascent company logo.
6.22% - 16.08% Variable
4.09% - 15.66% Fixed
Undergraduate and Graduate
6.54% - 11.08% Variable
3.95% - 8.01% Fixed
Undergraduate and Graduate
Earnest company logo.
5.62% - 18.26% Variable
4.11% - 15.90% Fixed
Undergraduate and Graduate
4.98% - 12.79% Variable
8.42% - 13.01% Fixed
Undergraduate and Graduate
College Raptor is not a loan lender and does not assume responsibility for suggesting a loan to a user who may not be eligible for it. Rates, terms, conditions, eligibility, approval, and other considerations are the decisions of the lenders and may vary depending on which lender or marketplace the user selects. We urge users to carefully consider and review all loan options and terms before committing to taking out a loan.