To repay your student loans, try to keep your monthly student loan payment at 10% or less of the net monthly income you plan to earn after you finish school.

Use a sample gross income to see the maximum monthly loan amount you could comfortably handle.

How much do you think you’ll be earning?

Once you come up with that amount:

- Multiple it by .8 (which is 80%).
- Then, divide that number by 12.
- Then, take that number and multiply it by .1 (10%).

The final number is the maximum monthly loan payment you could afford.

$ annual gross income x .8 / 12 x .10 = $ payment

Note: This formula assumes that your loan payment is 10% of your net income (take-home pay) and that your net income* *is 20% less than your gross* *income.

Be realistic about what your salary will be after graduation. Before you borrow, estimate the amount of debt you’ll be able to handle without a lot of financial stress.

Note: Your *net income, *or *take-home pay* is the amount you earn after taxes, insurance, or other costs have been subtracted from your *gross income,* the total amount you earn.

**Click the Next button to explore the basics of student loans.**