How Much Student Loan Debt Is Too Much?

How Much Student Loan Debt Is Too Much
Brazos Staff

Last Updated: 8/24/2026

BIG Ideas:

  • Excessive student debt can make it difficult to manage a monthly budget, pay your bills, and get the credit score you need to qualify for future loans.
  • The amount of debt to take on depends on your career prospects, financial situation, and risk tolerance.
  • There are a few guidelines to help you decide the amount of debt you can comfortably afford. 

Having money? Fun.

Having to borrow money? Not so much fun. 

But if you’re a student or parent looking to afford the rising cost of college, chances are you’ll need to take out federal or private student loans. That’s why millions of Americans carry student loan debt, with federal student loan borrowers owing more than $1.7 trillion collectively. 

Don’t get us wrong, borrowing money for an investment in your future can be a very wise decision. What’s not so wise, though, is borrowing more than you need, which can lead to costly student loan debt, long after college ends. Totally not fun.

So, how much student debt is too much?

The answer depends on your future income, career goals, and overall financial situation. Understanding how much student loan debt you can reasonably afford before you borrow can help you avoid financial stress after graduation.

How Much Student Loan Debt Can You Afford? 

Before deciding how much to borrow for college, it’s important to understand how excessive student loan debt can affect your finances after graduation. Too much debt can:

  • Make it harder to manage your monthly budget and everyday expenses. 
  • Affect your credit and your ability to qualify for future loans like buying a car or home.
  • Limit career flexibility, forcing you to focus only on jobs that yield higher salaries.
  • Increase financial stress that can affect your overall well-being. 

With so much at stake, it’s important to set a budget before you apply for federal or private student loans so you understand what you can realistically afford. 

Unfortunately, there isn’t a one-size-fits-all answer. The amount you should borrow depends on your financial situation, future career prospects, and level of comfort with debt. However, these guidelines can help you decide.

Guidelines for How Much Student Loan Debt to Borrow

  • Keep Your Monthly Student Loan Payment Manageable. 

A common guideline is to keep your monthly payment between 8 – 10% of your expected gross monthly income during your first year after graduation. 

For example, if you expect to earn $50,000 during your first year after college, your gross monthly income would be about $4,166. Using this guideline, you monthly student loan payment would ideally stay between $333 and $416. 

  • Keep Total Student Loan Debt at or Below Your First-Year Salary.

Your total student loan debt should not exceed your first year’s salary. So, if you expect to earn $50,000 after graduation, try to keep your combined federal and private student loan balance at $50,000 or less.  

When estimating your future salary, research average salaries for your intended career field to help guide your borrowing decisions. 

  • Consider Your Debt-to-Income (DTI) Ratio 

Another important financial guideline involves your debt-to-income (DTI) ratio, which compares your total monthly debt payments to your gross monthly income. You can calculate your DTI using this formula:

Your total monthly debt ÷ gross monthly income X 100

Most lenders recommend keeping your DTI at 36% or lower. That means no more than 36% of your gross monthly income should go toward repaying debt, including your student loans, credit card payments, auto loans, mortgage or rent, and other recurring debt obligations. 

When deciding how much to borrow for college, remember to account for all of your future monthly expenses that will impact your overall financial picture after graduation.

Borrow Only What You Need

Whichever guideline you apply, start by understanding your cost of attendance. Then look for ways to reduce how much you need to borrow by: 

The less you borrow today, the less you’ll have to repay after graduation. 

There isn’t a universal answer to how much student loan debt is too much. The right amount depends on your expected income, career plans, financial goals, and comfort with debt. Borrow only what you need, have a repayment plan before graduation, and look for every opportunity to reduce your college costs. 

Brazos Offers Private Student Loans to Help Make College Affordable

For more than 50 years, Brazos Higher Education has helped make education more accessible for students and parents. As a Texas non-profit, we offer competitive rates and no fees on private student loans that can help bridge the gap after financial aid and savings. Contact us today to learn more.