How Much Should I Borrow?

Since lenders see no reason to limit how much you borrow, it's up to you to apply the brakes.

If you're a student, your student loan payments once you graduate shouldn't exceed 10% of your expected monthly gross income. That means you'll probably need to limit your total borrowing to no more than two-thirds of your first year's salary.

If you're a parent considering borrowing money for your child's education, first make sure you're saving adequately for your own retirement and can cover your other bills. Remember, your student can always get his or her own loans, but no one will lend you money for your retirement.

How much you borrow depends on your goals and inclinations, but all your debts—including mortgage payments, ...

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