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Financial Friday: Student Loans

Valrie Chambers, Ph.D., Stetson University professor

Valrie Chambers, Ph.D.

When students ask how much in student loans they can afford, the answer varies. But here’s the rule of thumb from Consumer Reports: “The total amount of loans a student takes shouldn’t exceed the salary he expects to earn annually in the early years of his career.”

So, run a quick check on what graduates with your major make. Do this for your Plan B and Plan C major, if you are flexible in your major. Your loans should be less than this annual salary.

“According to the National Association of Colleges and Employers, the average starting salary for a person with a bachelor’s degree is $50,000. But if you don’t know what you want to pursue as a career, be more conservative,” according to the Consumer Reports article.

Betty Thorne, Ph.D.

If you earn $50,000 after graduation and borrowed that much, Consumer Reports notes, expect to pay $555 per month for 10 years (at 6 percent interest).

Given the choice, go with federal, not private, loans. Federal loans give you more protection than private loans because they come with flexible repayment plans and deferment or loan-forgiveness options, in some cases.


Valrie Chambers, Ph.D., professor of accounting, and Betty Thorne, Ph.D., professor of statistics and the Christian R. Lindback Chair of Business Administration, write Financial Fridays to bolster students’ financial wellness including preventing financial mistakes, safeguarding their assets and identity, and thinking critically about financial decisions.