Student Loans for CS Degrees: Smart Strategies

Computer science students are in a unique position when it comes to student loans. Unlike many other fields, CS graduates enjoy strong earning potential that makes loan repayment manageable. The median starting salary for CS graduates ranges from $70,000 to $90,000, with top-tier programs and companies offering $120,000+ starting packages.

According to the College Board, the average debt for computer science bachelor's degree recipients is $31,000, significantly lower than the national average of $37,000 for all majors. This is partly due to the availability of paid internships, co-op programs, and the fact that many CS students can work part-time in tech-related roles while studying.

The key is strategic borrowing. With proper planning, most CS graduates can pay off their loans within 5-10 years while maintaining a comfortable lifestyle. Many even qualify for aggressive repayment strategies using signing bonuses and high starting salaries typical in the tech job market.

For CS students, federal loans should always be your first choice. While private loans might offer lower interest rates for borrowers with excellent credit, federal loans provide crucial protections that are especially valuable during economic uncertainty in the tech sector.

The 2022-2023 tech layoffs demonstrated why federal loan protections matter. Thousands of software engineers lost their jobs, but those with federal loans could access income-driven repayment plans, deferment, and forbearance options. Private loan borrowers had limited relief options and faced potential default.

1. Direct Subsidized Loans: $3,500-$5,500/year (need-based, no interest while enrolled)
2. Direct Unsubsidized Loans: $5,500-$12,500/year (available to all students)
3. Direct PLUS Loans: Up to cost of attendance minus other aid (credit check required)
4. Private loans: Consider only after exhausting federal options

For CS students at expensive schools like Carnegie Mellon ($59,710/year) or Stanford ($61,731/year), you may need private loans to cover the full cost. In these cases, shop around carefully and consider whether the premium education justifies the extra debt. Many affordable CS programs offer excellent outcomes at a fraction of the cost.

The general rule is to borrow no more than your expected first-year salary. For CS graduates, this means keeping total debt under $70,000-$90,000. However, this varies significantly based on your target career path and school choice.

If you're targeting software engineer roles at top tech companies (Google, Meta, Apple), higher debt levels may be justified. New grads at these companies earn $150,000-$200,000+ in total compensation, making $50,000-$70,000 in loans very manageable.

• Conservative approach: Borrow less than 1x first-year salary ($70,000 max)
• Moderate approach: Borrow up to 1.5x first-year salary if attending top-tier program
• Aggressive approach: Borrow up to 2x first-year salary only for elite programs with proven outcomes

Remember that CS offers excellent opportunities to earn while learning. Paid internships at tech companies pay $6,000-$10,000+ per month. A single summer internship can cover a full year of in-state tuition at many schools. Factor these earnings into your borrowing calculations.

CS graduates have unique advantages when it comes to loan repayment. High starting salaries, frequent salary increases, and common signing bonuses create opportunities for accelerated payoff strategies that aren't available to most other majors.

The avalanche method works particularly well for CS grads: pay minimums on all loans, then put extra money toward the highest interest rate loan first. With discipline, many CS graduates can pay off loans 3-5 years early, saving thousands in interest.

1. Use your signing bonus strategically: Many tech companies offer $10,000-$25,000 signing bonuses. Consider putting 50-75% toward high-interest loans
2. Automate extra payments: Set up automatic extra principal payments of $200-$500/month as your salary increases
3. Leverage salary increases: The median CS salary increases 20-30% in the first 3 years. Direct raises toward loan payments
4. Consider refinancing after 1-2 years: Once you have stable employment and good credit, private refinancing might offer lower rates

However, don't be overly aggressive at the expense of other financial goals. Many CS graduates should also prioritize 401(k) matching, emergency fund building, and building technical skills that lead to promotions.

While most CS graduates earn too much to benefit from income-driven forgiveness, several programs are worth considering, especially for those interested in public service or non-profit work.

Public Service Loan Forgiveness (PSLF) forgives remaining federal loan balances after 120 qualifying payments while working for eligible employers. For CS graduates, this includes government agencies (NSA, FBI, Department of Defense), non-profits, and public universities.

• Public Service Loan Forgiveness: 10 years of payments while working for government/non-profit
• Income-Driven Repayment forgiveness: 20-25 years of payments (rarely beneficial for CS due to high income)
• Teacher Loan Forgiveness: Up to $17,500 for CS teachers in low-income schools
• Military loan benefits: Various programs for CS professionals in military/defense roles

State-specific programs also exist. For example, California offers loan forgiveness for CS professionals who work for state agencies, and several states have loan repayment assistance for cybersecurity professionals in government roles.

Note that forgiven loan amounts may be taxable income, which can create a significant tax bill. This is often called the 'tax bomb' and should be factored into forgiveness strategy calculations.

The best loan strategy is borrowing less in the first place. CS students have several unique opportunities to reduce their total debt burden through strategic program selection, earning while learning, and leveraging industry partnerships.

Community college transfers can save $20,000-$40,000 on total degree costs. Many community colleges offer excellent foundational CS courses and have transfer agreements with four-year universities. Complete your general education and introductory CS courses at community college, then transfer for your final two years.

• Consider in-state public universities: Top public CS programs offer excellent outcomes at significantly lower costs
• Apply for CS-specific scholarships: Many tech companies and foundations offer scholarships specifically for CS students
• Pursue paid internships aggressively: One summer at Google or Microsoft can pay for a full year of tuition
• Look into co-op programs: Schools like Northeastern and Drexel offer paid work rotations that reduce net degree cost
• Consider employer tuition assistance: Many tech companies offer tuition reimbursement for working professionals

For working professionals, online CS degrees often cost significantly less than traditional programs while offering similar career outcomes. Many top schools now offer online CS programs at reduced tuition rates.