What percentage of your gross salary does the Consumer Financial Protection Bureau suggest your student loan payment be in order to be affordable and limit your risk of delinquency and default?

A. No more than 14%

B. No more than 20%

C. No more than 8%

D. None of the above

Answer

C. No more than 8%

Explanation:

The Consumer Financial Protection Bureau (CFPB) recommends that your student loan payment should be no more than 8% of your gross monthly income to be considered affordable. Staying within this percentage helps reduce the risk of financial strain, delinquency, and default.

This guideline is based on maintaining manageable debt relative to income, allowing borrowers to cover living expenses and other financial obligations comfortably. Going beyond 8% can make it harder to meet other essential expenses, increasing financial stress and the likelihood of missed payments.