How much student debt should college graduates aim to take on?

OnToCollege encourages students to borrow no more than $5,500 per year—$22,000 total debt—which can be paid off by age 31 for about $250 per month. The average debt for college graduates is $35,210 as of March 2026. Borrowing more can result in large, life-limiting monthly loan payments during your 20s and 30s.

What is the Money Talk and why is it important for college planning?

The Money Talk is a candid family conversation about the budget for college, ideally held early in high school. Families who openly discuss money, debt, and college before shopping for schools typically fare better financially. For example, a family with $40,000 to spend over four years has a $10,000 annual budget, which can be supplemented by $5,500 in student loans, $3,000 in student earnings, and up to $2,500 from the American Opportunity Tax Credit, for a total annual budget of $21,000.

What are the best ways to find a financial safety school?

There are three top strategies: First, consider in-state tuition, which is often the best bargain and may include the added benefit of local internships or living at home. Second, explore private colleges offering merit scholarships based on GPA and ACT or SAT scores, which may result in a lower net cost than public colleges. Third, look at out-of-state public universities that offer four-year scholarship awards based on test scores and GPA to attract out-of-state students, and check neighboring states with tuition reciprocity agreements.

Choose a Financial Safety School

March 4, 2026

Avoid Extensive Student Debt

The average debt for college graduates is $35,210 as of March 2026. College should create financial freedom, not indebtedness. Extensive debt like this can hinder your future options.

OnToCollege encourages students to borrow no more than $5,500 per year—$22,000 total debt can be paid off by age 31 for about $250/month. By borrowing more, students may have large, life-limiting monthly loan payments during their 20s and 30s, compromising the only time in life when one is likely to be both self-sufficient and responsible only for themselves.

What is a Financial Safety School?

A college that offers engaging programs, a nice campus, and merit scholarships or a low tuition rate (ideally both) is a financial safety school. Families shopping for best-fit colleges should find at least one.

Many students have favorite reach schools—often expensive, elite academic institutions. A financial safety school reduces financial pressure on families. Increasingly, students are turning down Notre Dame, Georgetown, and Duke to go to the in-state public flagship university honors program, saving $40,000 per year.

Plenty of safety schools are available, offering both in-state and non-resident deals. Use the U.S. News College Admissions Calculator or a similar tool to compare your grades and test scores to school admissions statistics for freshmen. If yours are above the average for a school, it would be a safety school for you.

Parents and students are sometimes in tears when the aid package arrives from a dream school with a net cost of $65,000 per year. When the same package arrives from your safety school with a net cost of $11,450, students and parents know they can avoid heavy debt and stress. Perhaps the financial safety school won’t impress the neighbors or work colleagues as much, but they’re not the ones paying for it.

Have the Money Talk

Families who candidly discuss money, debt, and college before shopping for college typically fare better. Early in high school, families should have an honest Money Talk, a candid conversation about the family’s budget for college.

For example, a family with $40,000 to spend on a four-year college has a $10,000 annual budget. The student can borrow $5,500/year and earn at least $3,000/year (primarily during vacations), adding $8,500 to the annual budget. If the family makes less than $160,000 per year, they should also qualify for the American Opportunity Tax Credit, an annual tax credit that adds another $2,500 to the budget. In this example, the annual total budget is $21,000: $10,000 (the family’s budget) + $5,500 + $3,000 (the student’s annual contribution) + $2,500. This student needs at least two financial safety schools in the final college list that cost less than $21,000.

There are plenty of safety schools in America offering both in-state and non-resident deals.

Some parents feel pressure to dip into retirement savings or take on private loans to help pay for their student’s education. Options that make parents economically vulnerable are not good choices.

Best Recommendations to Find a Financial Safety School

In-state tuition is often the best bargain. You can look online at in-state schools and schedule a visit. Many in-state options will surprise you, even if you have visited before. Also, the ability to locate local summer internships or live at home may make that local option even less pricey.
Many private colleges offer great merit scholarship dollars. A solid GPA and ACT® Test or SAT® Test test score may earn big award money. Private colleges may turn out to have a lower net cost than public colleges. You can apply to find out.
In an effort to build their out-of-state outreach, out-of-state public universities often offer outstanding four-year scholarship awards based on ACT® Test or SAT® Test scores combined with GPA. Find a state or an area of the country you feel would be a good fit and start looking at public university websites there, focusing on their scholarship pages. Neighboring state colleges offering reciprocity to your state are a great place to begin the out-of-state search. Your college counselor should know where some of the best neighboring state scholarships and deals are located.
If a student is holding out for a reach school, beginning at a community college to save money might be an option.
Some community colleges have agreements with four-year colleges and universities that make transferring simpler.