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How Much Should I Borrow for College?


Young man fretting over student loan bills
Dougal Waters/Digital Vision/Getty Images


When you go to school for the first time or every year for that matter, you may be trying to decide just how much money you need to borrow to be able to pay for school. If you have applied for a Pell Grant, you will also be offered the opportunity to take out a Stafford Loan. Additionally you may be considering using private loans to pay for college.

Difficulty: Easy

Time Required: 2 hours

Here's How:

  1. First you need to determine how much tuition and fees will cost you for the entire year. This will determine how much you really need to borrow. You should set up your basic budget as well. You need to be able to cover your living expenses as well. This should be your rent, your food and your utilities. You should determine if you can save more by living off or on campus.You should limit the amount you spend on entertainment to an amount that you feel is reasonable, but remember that you don’t need to do everything while in college. Take your monthly amount and times it by the number of months that you’ll be at school each year.

  2. Next you need to add up any scholarships and grants that you have received. Additionally think about any savings that you have. You should add these numbers together. If you are planning on spreading your savings over the four years of college you need to divide the amount by four, and only include the money you are planning to use for the year.

  3. Then you should look carefully at what the differences in cost are between what you have, and what you need. You do this by subtracting your total of savings and scholarships from the total of your estimated budget. This is the amount that you need to find extra money for.

  4. You should consider taking on a part time job to cover the difference. Additionally you may want to work extra during the summer months in order to pay for as much as you can. Determine how much you want to work a week and then times it by minimum wage. Then times that by four. This way you will not overestimate how much money you will bring in.

  5. Finally subtract the amount of your part time income from the difference in cost that you need, and that is the amount that you should borrow. This will keep you from borrowing too much money.


  1. Open a savings account and put the majority of your money into it. Then transfer your monthly expenses into your checking account each month. This will keep you from overspending, and running out of money before the end of the semester.

  2. When you are borrowing money, it does matter whom you borrow it from. Start with borrowing as much as you can from subsidized Stafford loans, and then go to unsubsidized Stafford loans. Your last resort should be private loans, and you want to limit the amount you borrow there as much as possible.

  3. Be sure to attend and pay attention to the workshops about repaying your student loans. These will help you to have a realistic look at what you are going to pay back.

  4. One way to save on what you have to borrow is to attend an in-state public university. The quality of the education is on par with most private schools and the costs of attending the school is much lower. The book Debt Free U offers more savings strategies so you do not have to borrow as much to pay for school.

What You Need:

  • Amount of tuition
  • Monthly budget for living expenses
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