Based on conversations across Reddit (specifically in r/StudentLoans, r/personalfinance, and r/applyingtocollege), $10,000 in student loans is generally not considered "a lot" by Reddit standards, especially when compared to the average debt loads of $30,000 or more that many users discuss.
Low-income students who are loan-averse may actually decide not to enroll in college at all in order to avoid debt. Debt over a certain amount (about $10,000) may depress graduation rates and harm post-college financial security, especially for those in the bottom 75% of the income distribution.
People downplay this amount in here sometimes, but I view 10K as a really significant milestone: You're out of the everyday debt trap. You can handle an unexpected expense without going into debt or interrupting your other financial commitments and investments.
The rule of thumb is to compare your expected total debt to what you will earn in Year 1 and Year 5 after graduation. So for an engineer, $100K is not typical for a new grad, but at Year 5, $100K is not unusual. So by that rule of thumb, sorta/kinda OK to borrow $100K for engineering.
Federal Student Loan Debt by Age
Federal borrowers aged 25 to 34 owe an average debt of $33,150. Debt among 25- to 34-year-olds has increased 4.80% since 2017. 35- to 49-year-olds owe an average federal debt of $44,288.
Generally, any person in a trade or business who receives more than $10,000 in cash in a single transaction or in related transactions must file a Form 8300. By law, a "person" is an individual, company, corporation, partnership, association, trust or estate.
Fixed Rate Loans
For example, a 5-year loan of $10,000 at 8.59% APR would have 60 monthly payments of $205.60.
The "7-year rule" for student loans generally refers to when negative marks, like defaults, are removed from your credit report (around 7 years after the first missed payment or default date for federal loans, 7.5 years for private loans), but the debt itself doesn't disappear and must be paid off; it's also a benchmark in bankruptcy proceedings where federal loans can become dischargeable after 7 years from when payments were due, though proving "undue hardship" is required and difficult.
Student loans help pay for tuition and fees, as well as room and board and other educational costs like textbooks. Among those who borrow, the average debt at graduation is $27,420 — or $6,855 for each year of a four-year degree at a public university.
What is considered a lot of student loan debt? A lot of student loan debt is more than you can afford to repay after graduation. For many, this means having more than $70,000 – $100,000 in total student debt.
50% of your budget goes to necessities: rent, utilities, transportation, insurance, groceries, etc. 30% goes to wants: dining out, shopping, gym membership, entertainment, etc. 20% goes towards savings and debt repayment: student loans, auto loans, credit cards, emergency savings, etc.
The "27.39 rule" (often rounded to $27.40) is a simple financial strategy to save $10,000 in one year by consistently setting aside $27.40 every single day, making it an achievable micro-saving habit to build wealth or an emergency fund. It turns the daunting goal of saving $10,000 into a manageable daily action, emphasizing consistency over large lump sums.
Most Americans Earn Far Less Than $100k
According to last year's YouGov data, only 18% of U.S. adults earn more than $100,000 annually. And the biggest earners are mostly men—25%—and those aged 35 to 44—25%. For comparison, just 12% of women make six figures.
The smartest move with $10k depends on your financial situation, but generally involves prioritizing high-interest debt, building an emergency fund in a high-yield savings account, then investing in tax-advantaged retirement accounts (like an IRA or 401(k) boost), diversified index funds, or bonds/Treasuries for growth, while also considering investing in yourself (skills/education) for long-term returns.
Here's how Americans' average debt breaks out by generation: Generation Z: $34,328. Millennials: $132,280. Generation X: $158,105.
Some professional graduates take over 45 years to repay student loans. 21% of borrowers see their total student loan debt balance increase in the first 5 years of their loan.