Student loans: How much should you borrow for college?

Updated July 14, 2017

How much should you borrow for college?

When you open your financial aid award letter, you may find that you have been awarded more than your owing tuition and fee invoice. Students are awarded each year for the maximum amount they qualify for, based on federal guidelines, even if it is more than their tuition and fee invoice.

Establish Your Borrowing Goals

With this in mind, ask yourself what your long term goals are with borrowing your student loans.

  1. Do you need to borrow enough just to cover your tuition and fees?
  2. Do you need to purchase a new computer, or other education related expenses for at least the first semester to get you started with your new program?
  3. Do you only need to borrow enough aid to cover your first semester because you have tuition reimbursement through your employer?
  4. Do you even need to borrow the loans, or can you afford to sign up for a payment plan?

Determine Your Loan Repayment Plan

When you reduce the amount that you borrow each semester, the savings can be significant once you enter repayment. If you were to borrow everything that was awarded to you for a two-year graduate program, rather than borrowing only what you need to cover your tuition and fees, your payments would be over $700 each month!

Let’s take a look at this:

This is an example of what your repayment would look like if you chose not to reduce your loans to borrow just what is needed to cover your tuition and fee invoice (Based on cost per credit of $925 & a 33-credit program)

Amount Awarded Amount Borrowed Total Interest Monthly Payment Total Paid in Interest Total Paid on Loan
Reduced to Cover Tuition $31,500 6.0% $444 $21,574 $53,074
Borrowed All That Was Awarded $51,250 6.0% $723 $35,100 $86,350

Figures based on the federal unsubsidized loan with a fixed interest rate of 6.0% and the 10-year standard repayment

Here is what your monthly loan payments would look like if you decide to make the interest only payments on your loans while you are in school and during your six-month grace period.

Amount Awarded Amount Borrowed Total Interest Monthly Payment Total Paid in Interest Total Paid on Loan
Reduced to Cover Tuition $31,500 6.0% $350 $10,291 $41,791
Borrowed All That Was Awarded $51,250 6.0% $569 $16,742 $67,992

Figures based on the federal unsubsidized loan with a fixed interest rate of 6.0% and the 10-year standard repayment

If you make interest only payments while you are in school, you can save $10,000 - $18,000 over your ten year repayment. Making the interest only payments also saves you between $100 - $150 each month on your payment.

Next Steps

Whether you need to borrow what is offered to you in full, or you choose to reduce what you borrow, please keep this information in mind. If you are borrowing in excess of your tuition, and find that you don’t need the additional funds for education expenses, you can always reach out to your financial aid office to have them reduce your loan and send the additional funds back to your lender. Reducing what is borrowed will save you both in interest and in future monthly payments.

Have questions about financial aid at Quinnipiac? Click here to learn more about your options and to contact our financial aid office directly.