College Loans- How Much Is Too Much?

by Isabella Craig on 2013/03/23

college loans How much is too much to pay for college?

If you’re like me, you had parents who always used to say ‘money doesn’t grow on trees.” I never really completely understood the meaning of that phrase until much later on in life. I mean, how many kids have envisioned a ‘money tree’ in their backyard from hearing that phrase?

So, later on when I was preparing for college, I realized that my parents were right. It was time to get a college loan and no ‘money tree’ was to be found. We had to figure out how to make college happen.

That’s when I realized that college is expensive. The national average of college tuition for one year is around $20,000-$35,000. That’s just ridiculous in my opinion.

I see the value in getting a college degree, especially if it has been found that people with a college degree earn about $20,000 more per year than people with only a high school degree. And in a lifetime college degree holders can make $1 million more in lifetime savings.

But it seems the price of education just keeps going up and up and no one seems to notice or even care. We just keep paying the bill. Why do we get all ticked off when gas prices are higher, by about 10 cents a gallon, but not when our education costs rise to thousands of dollars higher? The percentage of household with college debt have doubled since 1989. DOUBLED!

It just seems to me that there should be a way for students got get more aid from the government with paying for college.

Financial experts advise that if you’re trying to figure out how much to pay for college, or how much of a loan to get, then you should calculate your loan by figuring how much you are predicted to earn your first year out of college to get a debt to income ratio.


You should stay below 15% when figuring this debt to income ratio. So, for example, if you were to take out $20,000 per year for a loan, which would give you a total of $80,000, then you would need to make $67,000 the first year after you graduate in order to stay under that 15 percent.

Uh…I don’t know about you, but that would be an excellent salary for someone right out of college. The fact is, that not a whole lot of people are able to get a salary like that just after graduating and especially with the job market in a slump the way it is now. So, this leads to so many households and students starting out in life with a nice hefty debt to pay off.

It just seems that there could be a way for the government to give students a little more help when it comes to something as important as education. And I’m not talking about help for the unmotivated students who are just looking for a free handout. I’m talking about the motivated students who are well-deserving.

What about you? Do you think college costs way too much?

Next Read: 5 Things to Know Before You Apply for a Credit Card

Courtesy of CreditCardShoppe

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