How much should you borrow in student loans for graduate school?

By Carolyn Morris | Published on February 23, 2026

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After months, perhaps even years of preparation, you’ve finally received it: an acceptance letter to the graduate program of your dreams. But whether you’re pursuing a Master of Business Administration (MBA) or heading off to law school, there is one common thread amongst nearly all graduate degrees: the hefty price tag.

Ideally, you have already established the ROI of your degree. Now figuring out how to pay for graduate school is an equally important step. But how do you decide how much to borrow for your graduate degree?

First, calculate the true cost of graduate school

Don’t make the mistake of assuming that tuition is all you need to worry about; there are books, fees, living expenses, health insurance, and other essential costs of living.

All schools are required to provide their best estimate of these costs listed as the Cost of Attendance (COA) through their financial aid office.

But then you need to factor in your own reality to this number. The COA does not typically include other “extras” such as trips with your fellow students over vacation or travel costs if your family lives far away.

For example, Harvard Law School estimates the cost of tuition alone for the 2024-2025 academic year to be $77,100. Additionally, the school anticipates that students will spend approximately $39,400 on living expenses, books, and other incidentals. They also note that the standard budget for students with a spouse includes at least an additional $16,000 in living expenses for the spouse and at least $8,400 for each child.

Luckily, many universities offer grants to subsidize a large portion of these costs. Harvard Law School, for example, says they offer grants to eligible students based on demonstrated financial need. The amount varies depending on individual circumstances, and students are encouraged to consult the financial aid office for personalized information.

Regardless of whether or not you qualify for grants, scholarships, or fellowships, you’ll likely also need to consider borrowing student loans to finance an advanced degree. But how much you actually borrow depends on two things: your financial past and your projected future.

How to pay for advanced graduate degrees

You can also read more here:

• How to Pay for Medical School
• How to Pay for Business School
• How to Pay for Dental School

In addition to federal student loans, private student loans¹ can be a valuable resource for financing your graduate degree. Earnest offers private student loans with competitive interest rates, flexible repayment options, and no fees for origination, late payments, or prepayment. Earnest also provides tools to customize your loan terms, allowing you to tailor your loan to fit your financial goals and needs.

Understand your full financial picture before graduate school

You can’t think about your potential student loans without considering your entire financial picture. After you complete the Free Application for Federal Student Aid (FAFSA) you’ll know how much you’re eligible to borrow with federal loans. However, deciding on how much you should (or need to) borrow depends on where you’ve already been, financially speaking, and how you prioritize your long-term goals.

While federal loans are a popular choice, private loans from lenders like Earnest can provide additional funding if you’ve reached your federal loan limit or are looking for lower rates based on your credit history. Earnest also allows you to check your eligibility and rates with no impact on your credit score, making it a hassle-free way to explore your options.

Get started by asking yourself a few questions:

Are you planning to work in public service?

In recent years, this has become more attractive to graduates because of the government’s loan forgiveness programs. Graduates working in public service can enter an income-based repayment program² for 10 years, after which the remaining balance may be forgiven. The catch is that graduates may not have the career and income mobility they want.

What is your projected monthly income after grad school?

Make sure your monthly payments are reasonable and affordable in comparison to your expected salary. For example, let’s say your total amount borrowed is $75,000 at a fixed  interest rate of 6.8%, the monthly payment for a standard 10-year term will be more than $860 after your graduation. Do you think you will be able to afford that with your new projected salary?*

*Example listed above is for illustrative purposes only and may not be representative of rates or terms offered by Earnest.

How is your current credit?

Federal student loan interest rates are set by Congress and can change annually. For the 2024-2025 academic year, the interest rate for Direct Unsubsidized Loans for graduate students is 8.08%.

If you have poor credit or limited credit history, be prepared for private student loan offers with higher interest rates. This will increase your monthly payments and the total interest you pay right off the bat.

How much student loan debt do you already carry?

When considering federal loans, some programs limit the cumulative amount you may borrow for your undergraduate and graduate degrees. As of 2024, the aggregate limit for Federal Direct Stafford Loans is $138,500 for graduate or professional students, which includes any Stafford Loans received for undergraduate study.

What are your long-term goals beyond graduate school?

Remember your debt-to-income (DTI) ratio when it comes time for a major future purchase like a house. Many lenders prefer a debt-to-income (DTI) ratio of 36% or less. However, some may allow a DTI up to 43%, depending on factors such as credit score and down payment size. Taking on more debt during graduate school could make it harder to qualify for a home later on.

Student loan borrowing rules of thumb for graduate school

In addition to these personal questions, financial specialists also like to sling around more generalized rules of thumb to consider.

First-year salary student loan borrowing rule

Some specialists recommend borrowing no more than your anticipated first-year salary (or more conservatively, no more than half). This rule might be harder to follow if you are going to live in a city with a higher cost of living.

Percentage student loan borrowing rule

Others say that your annual student loan payments should not exceed 10% of your future gross monthly income.

You will need to play around with the numbers to see where your anticipated loan amount falls within these guidelines. When you do, don’t forget to include the amount of interest you’ll pay throughout the loan term.

Remember, the interest rates you get on your loans when you originate your loans may be higher than the one you can get if you refinance after you graduate.

Earnest's private student loans can help you adhere to these borrowing guidelines by offering personalized loan terms. For example, Earnest provides an intuitive online platform that lets you see how adjusting your repayment terms or loan amount can affect your monthly payments and overall costs, ensuring you stay within the recommended borrowing rules.

Balancing your graduate school wishes with your financial reality

When it comes to borrowing for graduate school, the key is to borrow only what you truly need to cover your costs while keeping your future financial goals in mind. By calculating the full cost of attendance, factoring in grants or scholarships, and projecting your post-graduation income, you can determine a borrowing amount that’s manageable and aligned with your career plans.

From there you’ll be able to maximize your earning potential without being bogged down by excessive student loan payments, all while pursuing an exciting new career path and achieving life goals.

Earnest private student loans can help bridge the gap by offering flexible and transparent solutions. With no fees, customizable repayment options, and competitive interest rates, Earnest provides the tools you need to borrow smartly and focus on your education without unnecessary financial stress.

Take control of your graduate school financing today with Earnest.

About the Author

Carolyn Morris

Carolyn is a content marketer and editor who specializes in financial services. With over a decade of experience in the financial services industry, Carolyn has a passion for demystifying the loan application and repayment process for students and their families.

Disclaimer

Disclaimer: This blog post provides personal finance educational information, and it is not intended to provide legal, financial, or tax advice.

1 Before applying for private student loans, it’s best to maximize your other sources of financial aid first. It’s recommended to use a 3-step approach to assembling the funds you need: 1) Look for funds you don’t have to pay back, like scholarships, grants, and work-study opportunities. 2) Next, fill out a FAFSA(R) form to apply for federal student loans. Federal Direct subsidized and unsubsidized loans, excluding PLUS Loan for Parents and PLUS Loan for Graduate and Professional Students which require a credit check and a credit worthy endorser if the parent or graduate or professional student has adverse credit, do not require a credit check or cosigner, and offer various protections if you're struggling with your payments. 3) Finally, consider a private student loan to cover any difference between your total cost of attendance and the amount not covered in steps 1 and 2. For more information, visit the Department of Education website at https://studentaid.gov/.

2 As a result of ongoing court actions, the terms of some Income-Driven Repayment (IDR) plans, including the SAVE plan, may be subject to change. Please refer to studentaid.gov for the current status of these plans.