How Much Student Loan Debt is Too Much?

By Corey Buhay | Published on March 2, 2026

)

As the cost of college keeps rising, fewer and fewer students are able to pay for their tuition out of pocket. According to recent research from the Education Data Initiative, it costs the average student $38,270 per year to attend a four-year university in the United States. Right now, the average student loan debt in the U.S. is nearly $40,000 but many students borrow much more.

Depending on your field of study and career prospects, borrowing upwards of $100,000 to fund your higher education could either be a smart investment or a big mistake. So, how can you determine how much student loan debt is too much? Here’s what you need to know.

Key takeaways

• A mix of federal loans and private loans can help you cover the total cost of attendance for a college degree, including living expenses.
• Keeping your total debt lower than your expected starting salary can help make sure your bills are manageable long-term.
• Federal student loans offer more robust borrower protections than private student loans, so you should max out these before you take on debt from a private lender.1
• It’s common (and totally acceptable) to change majors — just make sure you understand the income potential for your chosen degree program and how that might affect your loan repayment plan.

A guideline for the right amount of student loan debt

Some students borrow hundreds of thousands of dollars to finance their college education, using a mix of federal loans and private loans. However, that’s not necessarily wise.

Personal finance specialists often advise students to take on less student loan debt than the average starting salary of their desired career. If you stick to this guideline, specialists say, you should be able to repay your loans within ten years.

While this rule of thumb sounds nice and tidy on paper, this financial guidepost isn’t always practical for all students. Depending on your financial situation, university of choice, and desired career, it may be challenging to keep your debt below $50,000 — or whatever it is your starting salary might be. This is more true now than ever before; over the past decade, tuition increases have vastly outpaced wage growth.

So, it’s wise to consider the cost of college as an investment and incorporate a few more factors into your calculations. What’s your earning potential over the span of 30 to 40 years? If you could be earning a six-figure salary just a few years in, that may justify taking out tens of thousands of dollars in loans. Beyond just your starting salary, here are some other factors to consider when you’re trying to determine how much student debt is too much.

Your field of study matters

What you study could determine how much money you’re able to make, not only in your first year out of college, but over your entire career. Bachelor’s degrees in some, highly paid majors make it easier to land jobs with high potential for six-figure income, while others might require some creativity to get that same return on investment.

Here are the five best-paying college majors. Remember: this is just a starting point, and might not reflect your experience. Annual salaries are influenced by the company you work for, your specific skills, your job title, the city where the company is based, and more. (For more info, check out the U.S. Bureau of Labor Statistics, which shares average salary details for specific job titles.)

• Chemical Engineering:
  • Average starting salary: $75,000
  • Mid-career median salary: $120,000
• Computer Engineering
  • Average starting salary: $74,000
  • Mid-career median salary: $114,000
• Aerospace Engineering
  • Average starting salary: $72,000
  • Mid-career median salary: $112,000
• Electrical Engineering
  • Average starting salary: $72,000
  • Mid-career median salary: $109,000
• Computer Science
  • Average starting salary: $73,000
  • Mid-career median salary: $105,000

As you can see, computer science and engineering take the cake when it comes to generous starting salaries. But you can still earn a high median salary with other degrees. Here are three of the best-paying non-engineering majors, according to data from that same analysis.

• Economics
  • Average starting salary: $60,000
  • Mid-career median salary: $100,000
• Construction Services
  • Average starting salary: $60,000
  • Mid-career median salary: $100,000
• Pharmacy
  • Average starting salary: $55,000
  • Mid-career median salary: $100,000

Your type of debt matters

There are two main types of student loans: federal student loans and private student loans. Federal student loan debt is often easier to manage than private student loan debt. This is because of the hardship protections, various repayment programs, and forgiveness options the federal government offers. That means that it can be easier to justify taking out lots of federal loans than lots of private student loan debt.

That said, federal student loans come with annual and aggregate borrowing limits. So, if you’re asking yourself how much is too much student loan debt — but you’re committed to taking out only federal loans — those caps will give you a pretty clear-cut answer.

How federal student loans work

To qualify for federal loans, the first thing you’ll need to do is fill out the FAFSA — the Free Application for Federal Student Aid — during your senior year of high school or the summer before you start college. This is how the government determines your eligibility for federal financial aid. You’ll then receive a financial aid award letter telling you how much you qualify for in federal student loans, work-study allowances, grants, and other forms of financial aid. If you don’t qualify for all the money you need, consider private student loans or private scholarships or grants to help fill in the gaps.

However, if you choose to take out federal loans, you’ll automatically gain access to these borrower protections.

• Deferment and forbearance: If you can’t pay your federal student loans, you can apply for various programs to save you from defaulting. (Student loan default can hurt your credit and make it hard for you to get a mortgage loan, credit card, or other forms of credit later on.) Your loan servicer may be able to offer you deferment or forbearance so that you don’t have to make student loan payments. Private lenders may offer similar options, but they’re not required to.
• Repayment plans: The federal government offers income-driven repayment plans that take into account student loan borrowers’ gross income and dependents. So, if your monthly payments are too high for you to afford on your salary, you can request for your payments to be lowered — or even temporarily suspended — until you’re making more money and able to make bigger payments. Some private student loan lenders have their own ways of helping students in distress. (Earnest, for example, lets borrowers in good standing request to skip a payment once per year.) But only the federal government offers income-based repayment.
• Forgiveness options: The federal government offers several different types of student loan forgiveness and cancellation. If you work in a qualifying public service career, for example, you may be eligible for a program called Public Service Loan Forgiveness (PSLF) after making on-time payments for 10 consecutive years. Or, if you enroll in an income-based repayment plan, you could have the remainder of your debt forgiven after 20 to 25 years of on-time payments.
• Student loan cancellation: The government also offers loan cancellation to borrowers who suffer from total disability, as well as those whose schools misled them or closed down before they’ve graduated. In the unlikely event this happens to you, you may be able to get your debt discharged.
• Subsidized interest: Depending on your personal finances and your family’s assets, you may be eligible for subsidized student loans from the federal government. These loans don’t accrue interest while you’re enrolled in an accredited American higher education program at least half-time. That could be at a four-year college or university, community college, trade school, or career or technical school.

Your plan for debt management matters

If you have a solid student loan repayment plan, you may be able to responsibly borrow more money than someone without a strong management strategy. Here are a few popular repayment tools to consider.

• Federal student loan consolidation: Many students end up taking out several different federal loans over the course of their college career. Oftentimes, each loan has its own loan servicer and its own monthly bill. That can be a lot to juggle when repayments begin. Fortunately, you can make your federal student loan debt easier to manage by getting a consolidation loan. Consolidation is a federal program that bundles all of your payments into the same loan. This can make it easier to make on-time payments. However, it may not lower your interest rates or save you money over time.
• Student loan refinancing: You can also plan to refinance your loans after graduation with a private lender, which can help you substantially reduce your monthly payments. If you have a decent credit score, you may be able to get a lower interest rate via private student loan refinancing.
• Making in-school payments: Making small payments toward your loan balance while you’re still in school can also help you make a dent in the principal of your loan before you graduate. And if your loans are accruing interest — common for both unsubsidized and private student loans — you can keep that interest from capitalizing by paying it down throughout your college years. To make these payments, consider taking on a part-time job while you’re in school, or saving money by living off-campus or attending a community college for the first year of your college career.

Your lender matters

As you decide how much to take out in student loans, also think carefully about your choice of lender. Be sure to consider more than just the total cost of the loan. While it may seem wise at first to choose the lender with the lowest interest rate, you’re going to be with this lender for a long time — potentially up to 25 years. You want to choose a company that has good customer service and a track record for helping current and recent college students as much as possible when they get into stressful financial situations.

Earnest, for example, offers borrowers a nine-month post-graduation grace period before they have to start making payments. That’s three months longer than most other lenders, including the federal government. All borrowers get a .25% interest rate discount just for setting up AutoPay. You’ll also be able to apply to refinance every four months to potentially get a lower rate or to switch your loan from a variable to fixed rate (or vice versa).

Use refinancing to get ahead on your student debt

If you feel like you’ve taken on too many student loans, refinancing could help. Refinancing gives you the opportunity to simplify your bill and, in some cases, dramatically reduce your monthly payment. And if you have a solid credit history, you could also qualify for lower interest rates. That could help you save up to thousands of dollars over the life of your loan.

If you’re ready to refinance, start by researching different lenders and shopping around for the best rates and perks. Earnest, for example, offers flexible repayment terms and some of the lowest rates on the market. We never charge origination fees, prepayment penalties, or any other fees, and we let borrowers skip a payment once per year.