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I am not sure how much I need to borrow. What is an appropriate amount to request?

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Determining how much to borrow is a crucial step in the financial planning process of your education. Here are some steps and considerations to help you calculate the appropriate amount:

  • Step 1: Calculate Total Cost of Attendance (COA)
    • Tuition and Fees: Include tuition, mandatory fees, lab costs, and other academic expenses for all your semesters until you graduate.
    • Accommodation: Estimate the cost of housing, whether on-campus or off-campus.
    • Books and Supplies: Add the expected cost for textbooks, software, and other course materials.
    • Living Expenses: Budget for food, transportation, personal expenses, and health insurance.
  • Step 2: Review Available Financial Resources
    • Scholarships and Grants: Deduct any scholarships, grants, or financial aid you have received.
    • Personal Savings: Include any savings you plan to use towards your education.
    • Family Contributions: Consider any financial support from family members.
    • Other Loans: Take into account any additional loans you might already have to used towards your education.
  • Step 3: Calculate the Gap
  • Step 4: Understand your repayments
    • MPOWER Loan example: Check out our loan repayment examples here to understand your estimated monthly loan repayment!.
  • Step 5: Borrow Wisely
    • Don't Over-Borrow: Only borrow what you need to minimize debt burden after graduation.
    • Consider Future Income: Think about your future earning potential and how much you can comfortably repay with your expected salary.

Example Calculation:

  • Calculate Total Cost of Attendance (COA):
    • Tuition and Fees: $30,000
    • Accommodation: $12,000
    • Books and Supplies: $1,500
    • Living Expenses: $10,000
    • Total COA: $53,500
  • Review Available Financial Resources:
    • Scholarships and Grants: $15,000
    • Personal Savings: $5,000
    • Family Contributions: $3,500
    • Other Loans: $10,000
    • Total Available Resources: $33,500
  • Calculate the Gap: 
    • Total COA: $53,500
    • Total Available Resources: $33,500
    • Gap Amount (Loan Needed): $20,000

By following these steps, you can determine the appropriate amount to borrow, ensuring you have enough to cover your educational expenses without taking on unnecessary debt.

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