The cost of attending college today is a daunting prospect. According to the College Board’s 2018 Trends in College Pricing Report , from 1988 to 2018, sticker prices tripled at public four-year schools and doubled at public two-year and private non-profit four-year schools, and many students use some kind of student loan to finance their degrees.

In 2009 Americans owed just over $700 million in student debt. Today, Americans owe nearly $1.6 trillion .

But Michael B. Horn , co-founder of the Clayton Christensen Institute, tells CNBC Make It that there’s a simple way students can predict roughly how much they can afford to borrow for college.

“As students look at the equation for how much they should borrow when they go to college, they ought to be thinking of the total debt that they take on as not being more than 10 to 15% of what their earnings are going to be when they leave college,” says Horn.

It’s a smart way to avoid taking on more debt than graduates will be able to handle paying back in the future.

“You really want to be mindful that you’re not crossing that threshold of payments that are just going to crush your income because they’re taking up, say, 20, 30% of your monthly paycheck,” he says. “If you’re in that realm, you’re going to have problems in the long-run.”

@eddie_rios via Twenty20

Students should think about what they want to study, research how much graduates at a given school in that major make, and not take on more than 10 to 15% of that amount in debt.

For example, according to PayScale , the average salary for an individual with a Bachelor of Engineering degree from New York University is about $91,296 per year. That means a student could plan to take on up to $13,694 (roughly 15% of their projected future salary) in loans to finance this degree.However, the average salary for a worker with a Bachelor of Social Work degree from New York University is about $50,008 per year, so based on Horn’s recommendation, students should only take on about $7,501 in loans. Additionally, many […]

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