What is the recommended maximum amount of money you should borrow for college?

The recommended maximum amount of money to borrow for college being less than your expected first year salary is rooted in financial prudence and ensuring a manageable debt load after graduation. When students keep their borrowing under the projected first year earnings, they increase the likelihood that they can pay off their student loans without incurring significant financial strain. This guideline helps ensure that monthly loan repayments remain a manageable portion of their income, ideally not exceeding 10-15%.

Borrowing more than your first-year salary can lead to financial challenges post-graduation, as it increases the debt burden significantly. If loans exceed this threshold, graduates may struggle to enter the workforce without being overwhelmed by debt, which can affect their ability to make other financial commitments, such as saving for a home or retirement. This perspective emphasizes a sustainable approach to financing education, aligning with the idea that students should complete their studies with reasonable, repayable debt, which could foster more favorable long-term financial outcomes.