How large a student loan will I need to take out?

If you’re considering going to college, you might be wondering how much you’ll need to borrow. The answer to this question is different for everybody. Some borrowers will need to take out as much as $100,000 or more in student loans, but others will only need to borrow a few thousand dollars. Here’s how you can determine how much you’ll need to take out in student loans:

1. Consider the type of education that you’ll need

The amount that you’ll need to pay in tuition depends on the type of career that you want to pursue. Careers that require post-alumni education or specialized degrees will cost more. However, these career paths also will lead to a higher income, which may enable you to pay off your debt more quickly.

2. Determine how much you can pay out of pocket

The amount that you’re able to pay out of pocket will be extremely important for most students. That’s because paying for some of your education out of pocket will reduce the size of the student loans that you need to take out, and it also can make a considerable difference if you are working during college.

3. Your credit score may play a role

Your credit score will play a role in determining how much lenders will allow you to borrow. If you have a low credit score, you might have a difficult time taking out large student loans, which affect the type of education that you’re able to afford. 

4. The interest rate will play a role as well

If the interest rates on student loans that you have access to are high, it will reduce the amount that you are able to borrow. As a result, the current state of the economy will play an important role in the size of the student loans that you’ll be taking out.

5. Consider if you’ll need student loans to pay living expenses

Living off of your student loans will result in accruing far more debt than you would otherwise. If you work during school, this is likely to be less of an issue.

For news and updates on student loans, check out the rest of our blog.