When taking out student loans, you need to care most about how much you borrow, what type of loan it is, and what repayment will realistically look like for your future income. Everything else is secondary to those core pieces.

1. Big-picture things to care about

  • How much you’re borrowing in total across all years.
  • What your monthly payment will look like after graduation.
  • Whether your starting salary can realistically support that payment.
  • Whether the loan has safety nets (income-driven repayment, deferment, forgiveness) if life goes sideways.

A common rule of thumb: try not to borrow more in total than you expect to earn in your first year’s salary in your field.

2. Key loan features to check before you sign

  • Type of loan
    • Federal Direct Subsidized/Unsubsidized loans usually come first: fixed interest, income-driven plans, forgiveness options, deferment and forbearance protections.
* Private loans are generally last resort: usually need a credit check and cosigner, fewer protections, terms vary widely.
  • Interest rate
    • Is it fixed or variable? Fixed = predictable; variable can go up over time.
    • Compare rates between lenders if you’re considering private loans; even a 1–2% difference matters a lot over many years.
  • Fees and discounts
    • Check for origination fees, late fees, capitalization rules (when unpaid interest gets added to principal).
    • Look for auto-debit interest rate discounts and any borrower benefits.
  • Repayment options
    • For federal loans: income-driven repayment, extended or graduated plans, and possible public service forgiveness.
* For private loans: ask what repayment plans exist, whether hardship options are offered, and whether there are prepayment penalties (federal loans don’t have these).
  • Grace period
    • How long after leaving school until you must start paying (often about 6 months for many federal loans, but it varies by loan type and lender).

3. How much to borrow (and what to avoid)

  • Borrow only what you actually need for tuition, fees, and essential living costs—not the full amount the school offers by default.
  • Before borrowing more, look for:
    • Grants and scholarships.
    • Work-study or part-time work.
    • Tuition payment plans that break the bill into monthly payments.
  • Remember that every extra dollar you borrow can cost roughly two dollars to repay after interest over time.

4. Questions to ask yourself (and your aid office)

Before you accept a loan, ask:

  1. What will my total debt be if I borrow this every year?
  2. What is my estimated monthly payment under the standard plan?
  3. If my starting salary is lower than expected, can I survive on what’s left after that payment?
  4. What happens if I lose my job or go back to school later?
  5. Are there cheaper school or program options (community college first, in‑state, scholarships) that would cut this borrowing down?

Your financial aid office can walk you through your offer, explain which loans are federal vs. private, and show sample repayment amounts.

5. One quick example

Imagine you plan to graduate into a field where you expect around 45,000 per year. If you finish school with 80,000 in loans, your standard payment could easily be several hundred dollars a month, and you may end up paying close to double the original amount once interest is included. That trade-off might be worth it for some degrees and schools, but you want to walk into it with your eyes wide open.

Bottom line: prioritize federal loans over private, keep your total borrowing in line with your realistic starting salary, and read every loan’s terms (rate, fees, repayment options, grace period) before you say yes.

Information gathered from public forums or data available on the internet and portrayed here.