Knowing your debt is an import ascpet when considering higher education as many of our students rely on loans to finance their schooling. Please see Student Loan Repayment for more information regarding how much you owe, repayment options, and consequences of default
- Student loan payments should not exceed 8-10% of your gross monthly income. Think about what your expected earnings will be when you graduate and determine if you will be able to afford your payments.
- Jump$tart Reality Check lets you answer questions about how you want to live your life after graduation. Using the information you put in, it will tell you how much you need to make in order to maintain that lifestyle.
- The following chart shows the annual income recommended in order to afford repayment for different loan debt ranges:
Annual Income |
Range of Maximum Affordable Student Loan Debt
|
$25,000 |
$13,616-$16,958 |
$30,000 |
$16,306-$20,383 |
$35,000 |
$18,997-$23,807 |
$40,000 |
$21,769-$27,150 |
$45,000 |
$24,459-$30,574 |
$50,000 |
$27,150-$33,998 |
$75,000 |
$40,766-$50,957 |
$100,000 |
$54,381-$67,915 |
$125,000 |
$67,957-$84,900 |
$150,000 |
$81,487-$101,887 |
$200,000 |
$108,767-$135,827 |
- The average loan debt of a PSU undergraduate student set to graduate this year is $21,408. For a student with this amount of debt to be able to afford their payments it is recommended they earn $35,000 a year.
- A dependent student that takes out the maximum loan amount for four years would borrow $27,000. Considering that some of that loan would be unsubsidized we can assume that the loan debt at graduation would fall into the $27,150-$33,998 loan debt range. In order to be able to afford repayment for that loan amount it is recommended that the annual income is at least $50,000.
- This is why it is so important to consider your plans after college before deciding to borrow student loans. The majority of students do not start out earning $50,000 per year right out of college.
- Paying just $20 extra per month on a student loan of $20,000 would save you $907 in interest and reduce the number of payments from 120 to 107.
- If you must take out a student loan, only borrow what is needed. Try not to take the maximum offered if you don't need that much.
- See here for more information on repayment.