Understanding Your Loan Debt

FinAid has developed a Student Loan Advisor calculator which provides you with an estimate of the amount of educational debt you can reasonably afford, given the expected starting salary for your major. This advisor is for Undergraduate students; there are other versions for Master's and Doctoral students.

Debt-to-Income Ratio

The debt-to-income ratio is a standard tool for assessing whether a borrower will have difficulty meeting his or her repayment obligations. For example, most banks will refuse to issue a loan if the total of your monthly debt payments (i.e., mortgages, credit cards, auto loans, educational loans, etc.) exceeds 37% of your income. It is recommended that your educational loan payments represent no more than 10% to 15% of your income. This calculator uses the debt-to-income ratio and a projection of your starting salary to derive a manageable debt load for you.

A good rule of thumb is that for the Stafford Loan, the manageable debt load is about the same as your starting salary.