As you prepare for college, the cost—and how you plan to pay for it—may be among your biggest concerns. Whether you’re a student or parent, you may be grappling with some tough decisions about student loans. 

According to our findings, two-thirds of students graduated with an average of $29,900 in student loans. That’s no small chunk of change. But how much student loan debt is too much? Consider these factors before making a decision.

The risks of borrowing too much money 

Often, it’s tough to estimate how much you can afford before college. You may sign a bunch of paperwork without understanding the future payments—or the long-term consequences. But student loans may impact your finances for many years beyond graduation.

With a large balance, it may be tough to afford student loan payments, which could put you at risk for default. Over one million borrowers default for the first time every year, according to our research. First-time defaults typically happen within the first three years. Three out of four millennials have some type of debt, according to a 2018 NBC News/GenForward survey, and they are delaying major life events. Folks are putting off buying a home, saving for retirement, getting married, and having children. It can be a massive burden for parent borrowers, too. The amount parents borrow has tripled over the past 25 years, according to a 2018 report from the Brookings Institute. What’s worse, 37% of borrowers 65 and older are currently in default on federal loans.  These large balances can put parents’ financial futures at risk—including retirement plans, depending on how many working years they have left.

How much student loan debt is too much? 

When it comes to student loans, every family’s “reasonable debt” number will be different. Whether you’re a student or parent, there are several factors to consider.

What to consider if you’re a student You can estimate your monthly payments with a Loan Payment Calculator. This calculator also tells you how much you will need to earn to afford these monthly payments.

You should also research your income potential. If you have already picked a major, you can see what type of salary range you may expect. The National Association of Colleges and Employers (NACE) 2019 starting salary survey is an excellent place to start. The U.S. Bureau of Labor Statistics and Payscale may also provide the salary insights you need.    You will notice a big difference in the starting salaries between, say, communications and engineering majors. These fields have salaries beginning around $55,750 and $69,188, respectively. Of course, a higher paying field isn’t a guarantee of job satisfaction or longevity in your career—but it’s worth considering before taking on a large amount of debt.

What to consider if you’re a parent 

As a parent, you may be eager to help your children achieve their college dreams. But before taking on large amounts of Parent PLUS loans, consider your own financial future. Take a hard look at your annual salary and budget. Be honest: how many working years do you have left until retirement? What about your spouse? Taking on large amounts of student loan debt could put your projected retirement timeline at risk—especially if you can’t work for as long as you expect. 

If you take on too much student loan debt, it may be possible to lighten the burden by changing repayment plans. Instead of the standard 10-year term, you may decide to switch to an income-contingent repayment plan or extended repayment. This may create enough room in your budget to save more aggressively for retirement.