It’s a good idea to do this with the borrower’s entire education in mind. For example, suppose a borrower is pursuing a four-year degree, and the anticipated all-in cost is $30,000. The borrower should think carefully about how to fund $30,000 annually for four years. This totals $120,000 in expenses.

This approach represents a good rule of thumb, though it’s imperfect. That’s because such a calculation doesn’t factor in the cost of inflation. Higher education expenses generally rise each year, often at a fast clip. Borrowers should conduct online research, use free online calculators, visit with financial aid professionals, and even talk to friends and family. Get a sense of how much money is needed to cover all anticipated expenses.

It’s often best to overestimate the funding required. If expenses are less than expected, surplus funds are always handy. If costs are more than hoped, having the funds available gives peace of mind. Borrowers who plan for the high end of expenses have a larger safety net of cash for unexpected expenses.

Once the borrower has the final anticipated cost of education on paper, they can subtract the funds they have in hand–or expect to have in the future. For example, if a student’s education costs $120,000, they can determine how much loan is needed by removing cash in hand, such as a $20,000 merit scholarship, a $5,000 work-study program, and a $10,000 grant. The borrower would subtract the $35,000 of available funds from the total cost of education. A loan of $85,000–the balance required to study for the degree–should cover most expenses.

Set aside additional savings for unexpected expenses while in school. These funds should be liquid, meaning they are available quickly as cash in a bank or a lock box in the borrower’s home or apartment. Such savings can complement a student loan and cover expenses that a student loan might not help fund.

Before starting to shop for student loans, have a plan in mind to pay back the debt. Many people take out debts and make minimum payments, limiting their spending ability for years or decades. Do the math to decide how much will be owed monthly when payments kick in. Understand how interest will compound over time. Borrowers should align this information to their anticipated monthly career earnings upon graduation. The borrower should make enough to cover the cost of student loan payments plus other living expenses, savings, and investments.