How Much is Too Much: Taking Out Student Loans

By Lorena Roberts on March 13, 2018

On average, the graduating class of 2016 incurred almost $40,000 in student loans. Incredible, right? Currently, US student loan debt sits at about $1.3 trillion. Who knew college could be so expensive? And who knew college students would be so burdened with paying tuition?

Taking out student loans is something almost every college student has had to consider. Sometimes you’re lucky enough to snag some scholarships that will cover the cost of your books, or maybe you can work on campus and receive tuition waivers. But for the majority of today’s college students, having student loan debt is not unusual. And with tuition on the constant incline, it doesn’t look like the student loan crisis is going to get any better.

Taking out student loans is a big decision — you’re signing yourself up for monthly payments for anywhere from 5 to 15 years of your life. But how do you know how much debt is okay? How do you weigh the options of taking out loans versus getting the degree you want? How do you know when too much is too much? 

Before you take out student loans, you should ask yourself if it’s worth it. Here are some guidelines for taking out student loans:

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1. Future salary versus amount of debt.

If you’re getting a degree in a high-paying field, it’s less of a big deal to have a mountain of student loans. People usually think about medical school this way. Medical school is a HUGE investment on the front end, but your salary for the rest of your career has HUGE potential. A $300 loan payment every month might not be that big of a deal.

However, if you’ve chosen to get a degree in a field that doesn’t pay nearly as well, it makes less sense for you to take out six figures of student loans. So before you sign on the dotted line, consider your possible future salary: are you going to make enough to justify the amount you’re willing to borrow?

2. Why are you taking out student loans?

Many college students have to work through their decisions when it comes to college. Have you chosen to attend a school where tuition is substantially higher than average? Are you choosing to attend a private college when you have options available elsewhere? Have you thought about attending community college for two years and then transferring in order to save money?

There are various ways to skimp when it comes to student loans. The best thing you can do for yourself is consider why you’re taking out student loans – and make sure there’s absolutely no way around it.

3. Have you considered all of your options?

Are private loans the only option you have for funding your education? Have you done your research when it comes to grants and scholarships? Don’t kid yourself – a quick google search doesn’t count as “doing your research.” There are lots of resources out there to help you fund your education without having to take out thousands of dollars in student loans.

I’ve recently discovered that some of my friends have actually taken out a student “loan” from their parents. Because paying for college was the student’s own responsibility from the beginning, parents are sometimes unwilling to budge on helping to pay for tuition. However, there might be way around this “family rule.”

If you can “take out” a loan from your parents, chances are, they’ll likely not charge you the same interest rate your bank is offering to you, or maybe not charge you any interest at all. This is probably the best possible situation (next to them just caving and paying your tuition for you).

student loans, student debt, taking out loans


4. Borrow only what you absolutely need. 

Taking out an extra few thousand dollars might not seem like too big of a deal. You might factor this into “living expenses.” You might be thinking you need a spare hundred dollars every month for an alcohol allowance, or maybe you want to be able to go on a really nice spring break trip with your friends. But let me remind you that all of your loans have to be paid back. You don’t get to pick and choose. If you take out $5K more than what you need – that’s $5k more that you’ll have to pay back (not including the interest).

5. Can you work part-time?

If you can work part-time while you’re in school, this can offset the amount of student loans you’ll need to take out. Maybe by working, you can afford groceries and “going out.” You want to minimize the amount of loans you take out. So whatever you have to do to save a little money here and there, the better! Do you really need to be wearing “top of the line” outfits while you’re in college? I promise you, you’ll be just fine wearing your high school gear and skimping on your student loans.

Taking out student loans is solely your decision. You are the only person who knows what’s best for you. But the best advice I can give you is to simply not be dumb about things. Being a teacher means you likely won’t be making six figures per year, so I wouldn’t advise taking out six figures in student loans.

Lorena graduated from The University of Tennessee in Knoxville last December with a BA in Honors Psychology. She has been accepted to Lehigh University's PhD School Psychology program beginning this August. In her spare time, she enjoys spending time with her Whippet mix, Gio, at the dog park and binge watching Netflix with endless cups of Hot Cocoa.

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