How much is too much in student loan debt? With big numbers on the table, it’s hard for your child to digest the true cost of college.
For true cost, we’re not looking at the sticker price on a college or university, rather the net cost after scholarships and grants to attend.
Let’s start with a rule of thumb from college student aid expert, Mark Kantrowitz: “If total debt is less than annual income, you should be able to repay your student loans in 10 years or less.”1
To help analyze your situation, utilize this occupational outlook search tool from the U.S. Bureau of Labor Statistics2 to get a feel for anticipated starting salaries based on job types.
Here's a look at ranges of average starting salaries with a bachelor's degree for different majors:
Think of college in terms of your return on investment. It’s not about choosing a major based on starting salary, especially if it’s not a good fit, but it’s about thinking about the major economically in terms of the impact that it will have on your child’s debt repayment after graduation.
Another rule of thumb that we stick with is: For every $10,000 of student loan debt borrowed, think of it like an additional $100 in monthly student loan payback upon graduation.
As you’ll see in the chart above, a total of $100,000 in student loan debt creates a substantial burden in the income of a new grad at over 30% of their monthly take home pay. Factoring in rent and other expenses, a debt of this size can be a burden to any new grad.
We nerded out a bit in this blog, but outside of the numbers, the overall message is to for your child to know the impact of their student loans before they attend.
It’s a decision that will have an impact on your child’s finances for years after graduation, so making sure they are educated beforehand will go a long way to reducing stresses down the road.
For questions on how to best plan education funding for your child, feel free to reach out, I’m happy to help!
All the best,
Andrew Holmes, Certified College Planning Specialist™
1. Selingo, Jeffrey J. “Perspective | How Much Is Too Much to Pay for College?” The Washington Post, WP Company, 27 Oct. 2021,
2. US Bureau of Labor Statistics: Occupational Outlook Handbook