How much debt can you repay?

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:

  1. Multiple it by .8 (which is 80%).
  2. Then, divide that number by 12.
  3. 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.