Treat debt and degree choice with caution. Rule of thumb: don’t take on more student loan debt than your estimated starting salary.

Education can be a huge and necessary opportunity as you turn dreams into goals, then goals into reality. The catch? Higher education is increasingly expensive and often requires taking on student loan debt.

While it can be used as a powerful tool, debt is a chainsaw and should be treated with caution. There are ways to pay for college in a financially smart way.

If you’re questioning whether or not college is worth it, check out this article that breaks down the current pros and cons: Is College Worth It?

The following rules can help you determine a safe amount of student loan debt to take on:

  1. Your total student loan debt should not exceed your estimated starting salary. If entry level jobs in your field of study can expect to make $30,000 in the first year of work, your maximum amount of student loan debt should be $30,000.
  2. Take advantage of financial aid if you have the option. Whether scholarships, in-state tuition, or federal aid (FAFSA), if you have the option to take advantage of one or more of these benefits, take it seriously. This may make the difference in getting a good education in a financially smart way. Grants, work-study programs, and reimbursement from certain employers are also great options to look into. If you have questions about how financial aid is calculated and whether or not you qualify, check out this article: Your Complete Guide to FAFSA.
  3. Start saving early and consider using a 529. A 529 Plan is a college savings investment vehicle that offers tax and financial aid benefits designed to be used for higher education and K-12 education expenses. These accounts are state sponsored, so specific rules vary from state to state. If you want to start saving for college while you or your child are young, this account is worth looking into.

The following video breaks down statistics on how much college costs, who’s paying for college, and how to best plan and save for this expense.

Video: Smart Ways to Save for College Even If Your Kids Might Not Attend