Guidelines for How Much to Borrow for Graduate Student Loans

how much to borrow

How Much Should You Borrow For Graduate School?

When you consider using loans to pay for your graduate education, think about how you will repay those loans. Keep in Mind:

  1. Your student loan payments should not be more each year than eight percent of your annual income.
  2. If your average student loan payment is more than this, your available cash for every day living expenses will be limited
  3. If your average student loan payment is more than this, you may have a harder time getting other kinds of loans, like one for a car or a mortgage.

Do some research into your chosen field or profession to see what the average starting salary for certain jobs would be. With that in mind, you'll know how much you can put toward basic living expenses and what you can afford in loan payments.

Estimated Monthly Payments

The chart below illustrates what the monthly payment would be (based on a fixed 6.8 percent interest rate with a minimum of a 10 year repayment term - which is typical for a federal student loan). It then shows the estimated income level for which that loan payment is considered affordable. If your monthly payments exceed 8% of your income, you will need to adhere to a strict budget, find ways to save on your student loans with borrower benefits or consolidation, or consider other options for financing your education.

Graduate Student Loan Borrowing Guidelines

Borrowing Guidelines
Amount BorrowedMonthly Payment
10yrs/120 payments
Income Level
$10,000$115$14,400
$15,000$173$21,600
$20,000$230$28,800
$30,000$345$43,200
$40,000$460$57,500
$50,000$575$71,900

Graduate Loan Repayment Options and Responsibilities

A number of loan programs reward borrowers for consistently making their payments on time. These benefits may take effect after a period of one to four years. The benefits may take the form of reductions in the interest rate or a rebate of origination fees. Some lenders have begun offering up-front benefits, such as preferential interest rates from the outset. The borrowers keep this as long as he/she makes on-time payments. A late payment causes the rate to rise under a specified formula. Borrowers should understand the importance of always making on-time payments. Borrower benefits are yours to use or lose.

Another option is a consolidation loan. At times, borrowers have more than one loan through several lenders. Consolidation is the process of having the lender buy all of your student loans. This makes re-payment easier because you pay one monthly amount, write out only one check and send it to just one place.

You may also want to consider a private loan: Those considering private loans should consider:

  • Private loans are available to students to assist in covering expenses traditional financial aid can cover.
  • Some private loans require school certification before being approved which are intended to cover educational related expenses while other private loans do not require school certification and may be used for various living expenses above and beyond typical educational expenses.
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