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Experts Provide Candid Realities on the Ideal College Borrowing Amount

How Much Money Should You Borrow for College?

Experts Offer Some Hard Truths

As families consider college costs, many find their schools of choice out of reach without heavy borrowing. Not every student incurs debt for an undergraduate degree, but it’s now become the norm at many colleges. About two-thirds of all bachelor’s degree recipients end up borrowing by the time they graduate, though the typical loan size varies by state and type of college.

In 2020, undergraduate borrowing averaged from $18,350 in Utah to $39,950 in New Hampshire. Those averages don’t capture Parent PLUS loans, a hidden side of education borrowing with a sum that now surpasses $100 billion. While borrowing is a necessity for many families in today’s higher education system, there’s no doubt that it can be risky, leaving some with debt they can’t afford to repay.

Understand Why You’re Going to College in the First Place

Before students or parents borrow a dime, it’s critical that students know why they want to go to college in general, and what they expect (or hope) to get out of the specific subject they’re studying. Too often, students dive head first into college and thousands of dollars of debt without researching their earnings potential or thinking about the long-term financial consequences for their families.

If a student’s projected career path isn’t high-paying or if they’re not sure what they want to study (which is totally normal), consider more affordable college options where you won’t need to borrow as much. For some, that could mean starting at a community college, choosing to attend an in-state public university, or commuting to save on housing costs. You should also factor in whether your career path will require graduate school and more loans in the future.

Stick to Federal Student Loans if Possible

The annual borrowing limit on federal students is generally manageable for undergraduates. Another common guideline is to borrow no more than your first year’s salary. However, it’s easy to over-project your earnings and borrowing more than the federal student limit involves taking Parent PLUS loans to help.

Federal student loans come with flexibilities that help protect borrowers from unexpected outcomes, but private loans don’t, so planning only for best-case job scenarios can be dicey. Still, the more difficult conversation is the choice between additional loans beyond the federal student limit or not going to college at all. Even the federal student loan ceiling might be too much to handle for some students.

Related Facts

  • About 45 million Americans collectively hold more than $1.57 trillion of student loan debt.
  • About one in six borrowers defaulted on their student loans.

Key Takeaway

Borrowing money for college can be a risky endeavor, so it’s important to approach it strategically and with an understanding of the potential long-term consequences. Think about your career goals and earnings potential before selecting a college and taking on debt. Stick to federal student loans if possible and be wary of private loans that lack the protections of federal loans. And remember, borrowing as little as possible is the best way to navigate this complex process.


With student loan debt skyrocketing, it’s more important than ever to think carefully about how much money to borrow for college. It’s crucial to have a clear understanding of your career goals and earnings potential, and to consider more affordable college options if necessary. Stick to federal student loans whenever possible, and know that borrowing as little as possible is always the best option.

Denk Liu
Denk Liu
Denk Liu is an honest person who always tells it like it is. He's also very objective, seeing the situation for what it is and not getting wrapped up in emotion. He's a regular guy - witty and smart but not pretentious. He loves playing video games and watching action movies in his free time.

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