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Most U.S. parents worry about saving enough to send their kids to college. That’s understandable, but there’s another potential problem — borrowing more than you actually need and incurring larger debt as a result. Here’s a “Goldilocks” approach to college loan borrowing — not too much, and not too little.

It’s imperative to find a balance for your college loans. If you borrow too much, you’ll be saddled with enormous debt.

Right now, four years of college can mean $23,186 of debt, according to the National Postsecondary Student Aid Study. A 1998 version of that study pegged the number at $13,172. And according to the College Board’s Trends in Student Aid Study, 10% of all student borrowers graduated with more than $40,000 in student loan debt. Advocacy groups say graduates are nine times more likely to leave school with more than $40,000 in debt today than in 1996.

That extra loan money could be better used elsewhere. For example, a 22-year-old college graduate investing $3,000 in an individual retirement account can earn about $95,000 by retirement (assuming there’s an 8% average annual return). If you’re paying too much in schools loans and can’t make that IRA contribution, you’ll be out of luck — and $95,000.

What’s really important is figuring out ways to borrow the right amount of money for college.

There are some decent rules of thumb to make sure you borrow the right amount of college loan money. Let’s take a look:

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The 10% rule. It’s a bad idea to borrow more than 10% of your expected annual gross income in your first job out of school. So if you’re heading into the teaching profession, and expect to make about $35,000 in your first year in the classroom, borrowing more than $3,500 (per school year) could be asking for trouble.

The 35% rule. Normally, student loans are only a piece of your overall debt picture. You may also have mortgage, car and credit card payments to contend with, not to mention utilities and other cost-of-living obligations. To keep your budget in line and financial health in order, debts shouldn’t exceed 35% of your gross pay.

Know what you’ll pay. Here’s where your lender can help you. Given a specific loan and a specific interest rate, over a specific period of time, you should know going in what your total loan payment will be. Again, your lender should be able to provide you with these figures. For additional help, the College Board offers a student loan repayment calculator.

Aim for a state school. Historically, state colleges have provided residents with great breaks. Rather than borrowing too much to pay for an out-of-state glamour school, aim to get a good price at a school closer to home.

We don’t blame you for wanting the best possible college education. But if you borrow too much, expect to be held accountable. Your personal finances could suffer for years if you’re not careful.

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