Approximately 43.6 million U.S. citizens are in federal student loan debt, resulting in a grand total of $1.766 trillion, or 9.5% of all consumer debt in the country. These loans are in varying amounts and make it extremely difficult for new graduates to get by financially, creating a domino effect that results in more and more consumer debt.

But how much is too much student debt? You may wonder if you borrowed too much or are currently considering a reasonable amount to borrow. Whatever the case, here’s more on how to determine the amount of student debt you should take on and some options for those struggling to make payments after college.

How Much Debt Should I Have in College?

While there’s no “right” amount of student debt to take on during college, the general rule is this: never borrow more than you’ll make your first year out of college. So, if you borrow $50,000, you should plan to make that or more at your first job.

Further, you should consider the standard of living you hope to have after college, other necessary expenses, the cost of furthering your education, and more. These factors may require you to earn more than the amount you borrow your first year.

In addition to internal factors that might influence your decision, you should also consider external factors. For example, you never truly know what you’re going to make your first year out of college. Borrowing money based on the assumption that you’ll make a certain amount in the future is very risky, especially since you do not know what the state of the economy will be once you graduate.

Take 2020 for instance. Students who graduated during the pandemic stepped into a highly volatile job market due to something no one could have predicted. This is an extreme case, but the idea is to plan for the unexpected when accruing any form of debt.

How Much Debt Are Students in?

Student debt has grown significantly over the years, tripling its total since 2007, making it difficult for recent grads to keep their heads above water. Many (92%) of student loan borrowers owe federal debt totaling $37,338 on average per borrower. The remaining 8% owe private loans totaling $54,921 per borrower. In Minnesota specifically, the average student debt per borrower is $33,852.

These bleak statistics help shed light on the ongoing issue of student debt in America, and borrowers are unlikely to have their debt paid off within the first few years of their career. Nearly half of all student loan borrowers still owe at least $20,000 even two decades after receiving their diploma.

Student Loan Debt by Major

In 2022, the top five majors with the highest median debt included the following:

  1. Behavioral Sciences – $42,822
  2. Religious Education – $31,984
  3. Culinary Arts and Related Services – $28,586
  4. Human Services – $28,586
  5. Education – $28,001

Does the Government Forgive Federal Loans?

According to a recent update from the U.S. Department of Education, the Biden-Harris Administration provided 804,000 borrowers with $39 billion in automatic student loan forgiveness. Throughout the duration of the Biden-Harris Administration, 3.4 million borrowers have had a total of $116.6 billion forgiven.

To achieve this amount of debt forgiveness, the current administration proposed fixes to income-based repayment plans to reduce monthly payments for those that qualify.

Who’s Eligible for Federal Debt Relief?

Here are the requirements to qualify for federal student debt relief:

  • Your annual income must be under $125,000 for individuals and $250,000 for married couples
  • Pell Grant recipients who meet the income requirements are eligible for up to $20,000 in debt relief
  • Non-Pell Grant Recipients who meet the income requirements are eligible for up to $10,000 in relief

Can You Discharge Student Loan Debt in Bankruptcy?

Student debt, alimony, and child support payments are among the few types of non-dischargeable debt in most bankruptcy cases. However, there is one exception to student debt — undue hardship. If you can prove the following, you might be able to discharge your student debt through bankruptcy:

  • Repaying the loan prevents you from maintaining a minimal standard of living
  • The hardship would continue through most, if not the entire, repayment period
  • You have made good-faith efforts to repay the loan

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