If you need to borrow to finance your education, you should accept only the student loan amount necessary to cover your college costs (tuition and fees, housing, meals, books, personal expenses, and transportation). Remember, when it's time to repay your student loan, you'll likely have other financial obligations as well—like rent, a car loan, and living expenses.
That’s why it’s important to calculate how much you'll be expected to repay on student loans each month and compare that amount to what you think you'll earn after graduation. Check out salary.com's salary wizard which can give you a general idea of what salaries are today. Ask yourself these three basic questions:
- What percentage of my monthly income is the monthly loan payment likely to be?
- Can I make my student loan payments, cover my living expenses, and start saving money?
- Should I attend a school that is more affordable?
Use our Budgeting Calculator to identify key budget items and better understand your financial situation. Even if you don't finish school or can't find a job, you'll still have to repay your loans—with interest. So you should borrow only what you absolutely need to cover the cost of your education and related expenses.