In what’s become an annual ritual of sorts, students applying to American colleges this year will reckon with an age-old question: How do I pay for higher education without landing in the hole for years to come?

No one size fits all approach exists, but there are general principles that should guide all prospective undergraduates who are considering taking out loans to fund their college education, financial aid experts say.

“There’s a lot of noise out there right now about student debt” that is “very broad and not necessarily that relevant to a student who hasn’t yet borrowed,” said Jessica Thompson, vice president at the Institute for College Access and Success, a nonprofit working to increase college affordability.

If you must borrow to attend college, she said, “really stay focused on what you actually need to cover.”

According to a TICAS analysis, 64% of college graduates in Pennsylvania had student loan debt in 2019-20. Their average debt load was $39,375.

Nationally, the average sticker price at a four-year, in-state public college — including tuition, fees and room and board — was more than $22,000 during the 2021-22 school year, according to a College Board report on college pricing. At four-year, private nonprofit colleges, the average cost was almost $52,000.

There has been some relief. In August, it was announced that the U.S. Department of Education will provide up to $20,000 in relief to borrowers who received federal student aid, called Pell Grants, and who make less than $125,000, or less than $250,000 for married couples. Those who meet the income levels but were not Pell Grant recipients could see up to $10,000 in relief.

But many prospective college students will likely take out more than that amount to attend school.

Top financial concerns that students entering college have include what types of loans they should be exploring, what factors they should consider when deciding their loan amount and whether alternatives like scholarships or grants could fill the gap.

Here’s what experts recommended in response to questions provided by the Post-Gazette:

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How much should students borrow to pay for college?

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As you might’ve guessed, it depends.

Different students require different amounts, according to Melanie Hanson, editor-in-chief of Education Data Initiative’s Refinance Student Loans blog. For some, it’s smart to borrow what they need to cover classroom basics like books and tuition. For others, room, board and transportation costs may also have to be considered.

“In most cases, it’s best to only borrow as much as you’re going to need to meet your expenses during school,” Hanson said.

When projecting repayment plans and amounts, students and their families should take into account how much they’re expected to make post-graduation depending on what field of study they enter.

If possible, some experts suggest trying not to borrow more than the expected starting salary at graduation.

“I like this particular tip because it introduces the idea of college as an investment and it encourages people to think about how the school and major that they select will influence their earning ability,” Michael Lux, founder of The Student Loan Sherpa, a website dedicated to student loan education, said.

Thompson said federal student loan limits — which include a $31,000 cumulative cap for dependent undergraduates — provide “pretty decent protection against significant overborrowing.”

“If you are able to stay within the federal loan limit for undergraduates, I don’t think borrowers should worry about that,” she said.

And just because you can borrow an amount doesn’t mean you have to, Thompson reminded.

“You don’t have to borrow the maximum. Some schools package the maximum available immediately into your financial aid package. You don’t have to take it,” she said. “Keep in mind that you are an active agent in this process.”

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What kind of student loans are preferable?

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According to NerdWallet, 92% of student loans are owned by the U.S. Department of Education. Private student loans make up almost 8% of total outstanding U.S. student loans. Experts recommended that between the two, students relying on loans to finance college should take out federal loans, and as much as possible, steer clear of private loans.

“If you must borrow, stick with federal student loans,” Lux said.

He added that although federal loans sometimes have slightly higher interest rates than private loans, their repayment terms are more generous. This is because they offer repayment plans that are income-based and have protections like student loan forgiveness, deferment and forbearance.

The interest rate for undergraduate federal loans is 4.99% for the 2022-23 school year.

Thompson noted that federal student loans have a “light at the end of the tunnel” because any remaining balance on a loan for undergraduate study is forgiven after 20 years. The Public Service Loan Forgiveness program, too, can erase student debt down the road for some people working for qualifying employers.

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What role can parents play?

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Parents can help fund their children’s college education by applying for a parent PLUS loan, which requires a credit check, according to CPA and tax strategist Paul Sundin.

Two parents can both apply for a parent PLUS loan, but the total amount received cannot exceed the annual limit. The annual limit can be calculated by subtracting the amount of aid received from the total cost of attendance.

The interest rate for parent PLUS loans is 7.54% in 2022-23.

The repayment period for a Direct PLUS Loan begins immediately after the parent has received the last disbursement of the loan, according to studentaid.gov. Parents are able to defer making payments while their child is enrolled at least half time, and for an additional six months after their child graduates or drops below half-time enrollment.

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For students unsure of their post-college career path, what’s a reasonable budget?

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Thompson advised students against thinking that any particular college major provides greater license to borrow more funds. “Undergraduate credentials are very portable,” she said, reiterating that regardless of what students intend to study, they should only borrow to cover the cost of their needs.

Above all, Thompson urged students taking out loans to finish the degree programs they start.

“So much vulnerability in terms of outcomes in reference to taking on debt is associated with students who aren’t able to complete that degree,” she said. “They aren’t able to get their return in the labor market,” making it difficult for them to pay off even smaller amounts of debt.

With nothing guaranteed in the future, Siegel said, students shouldn’t take out loans expecting them to be forgiven later on. While one can estimate how much their earning potential will be post-graduation, it’s better to err on the side of caution, he recommended.