How Much Should We Borrow Student Loans?

It seems like a pretty obvious statement, doesn’t it – borrow just what you need for student loans? But when trying to understand the cost of college, and considering how much you and your student can realistically repay in the not too distant future, it can be frustratingly difficult.

It may feel like you need to be a bit of a future prognosticator, but here are some tips that should help you with a reasonable amount:

Calculate the total cost of attendance


Some parts are pretty obvious, but others may be a little vaguer. Some of these costs may already be covered by parents, so they may not necessarily be taken into account. Your costs may include:

  • Tuition, fees, and expenses
  • Accommodation – student dorm or off-campus
  • Food – meal plan or cooking on your own
  • Travel expenses to return to campus, either daily or for all breaks
  • Car expenses such as gas, insurance, parking, and repairs if a student has a car
  • Books, computer
  • Cell phone and data plan, if not included in the family plan.
  • Health insurance, unless covered by parental policies.
  • Appropriate clothing for different seasons.
  • Laundry.
  • Sorority or Fraternity – If your student chooses to join a Greek organization, charges may apply.
  • Entertainment – How many times does a student plan to go out each month are there free movies and entertainment on campus, what are the costs for pizza parties and other entertainment?
  • Personal expenses – school supplies, hygiene items, daily coffee, snacks, haircare – it can be surprising how fast small items look.
  • Other – sports equipment, uniforms, fees for different clubs, tutoring allowance if needed and other things that can increase your expenses.

Estimate how much is available to cover these costs:


The school needs to give you a pretty good idea of ​​how much you received in financial aid.

This includes scholarships and grants from the college itself, federal financial aid that you might be eligible for, and any state aid that may be available. For this amount you can add:

  • The value of any federal degree program that a student can participate through school to make money.
  • Private scholarships that you have won yourself.
  • Extra money families and students can earn on a part-time basis.
  • College Savings Account.
  • Gifts from grandparents and other relatives.

Decide on the loan amount and type of student loan


When you make these calculations, you should have a much better idea of ​​how much money is needed.

Try to borrow just that amount through a parent or student loan. Use federal student loans first, then research carefully to determine which private student loan lenders offer the best interest rates and repayment terms for your family situation.

Once you receive the money and pay for the school, work with your student to create a strict budget for spending the balance. Make sure the money is used only for reasonable purchases; it should not be spent simply because it is available.

If the extra money remains, he should be saved from applying for next semester’s tuition.

Keep track of your student’s expenses so you can go through these budgets again for the next semester and school year.


Look at areas where you think your student may spend more or less money. Make reasonable forecasts for expected tuition increases and additional costs as your student takes more advanced classes.

Try to keep the debt as low as possible so as not to place an unreasonable burden on your family or your student. You need to keep an eye on how much it is lent, so you can reasonably estimate what your monthly payment will be after graduation.

Although there are different types of repayment plans, especially from the federal government, you want to make sure that your students are really likely to be able to make those payments with the money they will earn.