Maximum Amount of Student Loans

The government will only give you a few thousand dollars a year in loans to pay for your school. If you are reading the Money Smart Grad blog, you are likely to be a college grad with student loans. Therefore, you know the damage that they can do. You might have some extra PLUS loans or private loans as well. You might be thinking of going to grad school, which probably means that you will need even more loans on top of what you already have.

To tell how much you should take out in loans, you should look at the salaries of potential careers you can undertake after graduation. For example, I am planning on an MBA and I am researching how much a manager or a director of a firm or a non-profit can make and what I need to land that position. If you would qualify for a listing after graduation, and the position pays $100K and that seems to be the average, you should not take out more than a total of $100K in loans in total. A good rule of thumb is to never take out more loans than you will make the first year out of college or grad school. This means that if you are going to grad school and you expect to make $100K the first year, but you already have $25K in undergraduate loans, you should only take out $75K more for a total of $100K.