skip to Main Content

How Much College Debt Is Too Much?

How Much College Debt Is Too Much

You have set your sights on college and think you have a plan to forge ahead, but what about possible debt from college? How much can you really afford, and how much college debt is too much? 

In most cases, your major and career path affect how much debt you can afford. Usually, a student doesn’t make this decision until their sophomore year of college. However, the sooner you decide the better in order to form a strategy. 

Choosing The Right Major

Choosing a major with a good return of investment (ROI) can make paying off your borrowed money less harsh on your pocket. For instance, a median wage for a chemical engineer is $68,000 vs. a civil engineer at $60,000 and a business major at $45,000. Remember though, it would be a grand idea to like your major for a happier future. This affects the rest of your life.

The Association of Public and Land-Grant Universities (APLU) says that about 42% of those who go to public schools have zero educational debt to take care of after earning their degrees. The majority of bachelor’s degree recipients from four-year public colleges and universities have student debt of less than $30,000. 

However, it doesn’t necessarily mean that your debt is lower if you attend a public school versus a private school. Many private schools offer more financial aid packages, usually of higher value than public ones. The net price and not just the sticker price should be considered.

Consider What’s On The Other Side Of Graduation

There are two basic formulas for discovering the bottom line of this question. The bottom line for each is about the same. Some recommend not taking out more money than 80% or 100% of the estimated first-year salary. 

Example: If the medium annual salary of a dental hygienist is $74,070, you should limit the amount of money you will borrow to $59,256, or no more than the amount of the paycheck you are expecting to get a year.

The US Department of Education suggests an amount where one’s monthly student loan payment is 8% to 10% of the estimated monthly salary.

Example: Using the dental hygienists’ salary of $74,070, making $6,172.50 a month, you should keep your monthly student loan payments at $493.80 to $617.25.

Below is a table provided by College Reality Check showing the average repayment terms for various types of educational attainment:

Educational Attainment Repayment Period
Some College 17.2 years
Associate Degree 18.3 years
Bachelor’s Degree 19.7 years
Graduate Degree 23.0 years


Although some of these numbers may frighten you, below is another table from the same source that shows the possible repayment period for amounts owed. 


Total Loan Debt Repayment Period
$7,500 or lower 10 years
$7,500 to $10,000 12 years
$10,000 to $20,000 15 years


Factors To Consider

There are five main factors to consider when deciding how much to borrow.

  1. Interest Rates: The higher the rate, the more interest that will accrue. 
  2. Earning Potential: According to the College Board’s ‘Education Pays’ report, the median pay for those with a bachelor’s degree was $24,900 higher than the median salary for those with only a high school education.
  3. Employability: The unemployment rate for individuals between the ages of 25 and 34 with a bachelor’s degree is just 2.2%. For individuals in the same age group that only have a high school diploma, the unemployment rate jumps to 5.7%.
  4. Eligibility for Student Loan Forgiveness: Federal student loan borrowers who work for government agencies or non-profits can qualify for Public Service Loan Forgiveness after 10 years of employment.
  5. Future Goals: What do you want your life to look like after graduation? If you dream of moving to another part of the country or overseas, launching a business, or starting a family right away, having as little student loan debt as possible could be much more important so you can make those goals a reality.


If your goals are more focused on building your career and you are willing to make sacrifices to your lifestyle, taking on more debt could be more manageable since you’re more likely to be able to afford the payments.

Even with the right formulas and information, you are the only one who can make the right final decision for yourself. You can do this – look how far you have already come!

Looking For Another Option For Loans? Check Out Juno Student Loans!

My College Planning Team has joined forces with Juno Student Loans to solve the high-interest student loan problem for students. Learn more about Juno in our blog Meet Juno Student Loans (Formerly LeverEdge).

Joanne is a professional speaker, writer, organizer, and certified life coach. She received her Communications/Creative Writing BS degree from Chapman University in Orange, California.

Since deciding to attend college in her later years, she is well versed in the why and how it works. Her children were inspired to continue their education after high school, after watching their mom attend at an advanced age. Joanne was working for a Fortune 500 Company and knew getting a college degree would make her more competitive in the job market. She started at the junior college level and transferred her credits to Chapman. To her amazement, after graduation, a new Communications Department opened up and she was selected to be one of the Communications Specialists in the new department. It was also at a pay increase which made it all the more satisfying.

Currently, Joanne has her first two e-books in her Better Life Series on “How to Have More Love and Peace in Your Life,” and “Four Steps to Happiness.” “Beyond Hoping” is in the works along with a children’s book.

Joanne has seen how a college education can create new opportunities for young and old students and wishes she had a team like My College Planning Team available to her and her children to assist with their process and save them time, stress and money.

Back To Top