The financial aspects of college loan burden are analyzed, based on the view that loan burden is a function of a borrower's capacity to repay the debt obligation. The following components of a financial model of indebtness are addressed: the stock of education loans at the time repayment begins, the repayment flow associated with each stock of loans, the borrower's earnings throughout the repayment period, and the borrower's expenditure patterns throughout the repayment period. According to the proposed model, the measure of loan burden is equal to the ratio of repayments to discretionary earnings during the repayment period. The principal determinants of the amount of debt that students incur to finance their school are the cost of schooling, financial assistance, and personal and market risk. Consumption expenditures and their associated standards of living are used in the model to derive estimates of discretionary, or residual, earnings available to borrowers from which they can repay their loans. New empirical evidence on student indebtedness and earnings is presented as an example of what is required to compute loan burdens for various subpopulations with the model. Attention is directed to: debt data sources, earnings data sources, selection of student categories, and mathematical form of the model. Possible applications of the model to current policy issues are also examined. Suggestions to expand the model's capacity and data base and to allow it to better explore effects of federal policy changes are offered. Results of three surveys on student debt are appended: National Longitudinal Survey of High School Seniors, Survey of Recent College Graduates, and Graduate and Professional Student Financial Aid Survey. (SW)