Let's start backwards. Financial planners suggest limiting your student loan payment to no more than 10% of your monthly, after-tax income.
We've made it easy to figure that out. By using just one figure, your anticipated monthly income, you can now see how much you can borrow without sacrificing your financial future.
Step 1: Estimate your annual income, divide it by 12 and enter that figure in the Gross Paycheck (monthly) box using the MA Paycheck Calculator and click ENTER/RETURN. Note: The calculator will automatically subtract federal and state taxes, as well as required Federal Insurance Contributions Act (FICA) payroll taxes which support Social Security and Medicare.
Step 2: The 50/30/20 Personal Budget takes your Estimated Take Home Pay and automatically calculates a personal monthly budget for you, based on recommended percentages: 50% Needs, (rent, groceries, utilities, etc.), 30% Wants (hobbies, vacations, dining out, etc) and 20% Savings/Paying off debt (emergency fund, retirement / student loans, car loan, etc.)
Step 3: The Student Loan Calculator then uses half of your savings/paying off debt to calculate your Maximum Loan Balance or the TOTAL amount (NOT annual amount) you should borrow for undergraduate and graduate school without sacrificing your financial future.
Once you know how much is a reasonable TOTAL amount to borrow, you'll have a better sense of which schools are a good financial fit for you.