I wouldn't let my children take out more than $10,000 a year in loans.
I came out of school (undergrad and law school) with $21,000 in loans, but that was over 25 years ago. I received no help from my parents and I didn't qualify for financial aid; back then it was possible, by going to an inexpensive school and working a lot of hours, to get out with a reasonable amount of loans. I'm not sure what the equivalent of my loans would be today, but to put it into perspective, at the time it was roughly half the starting salary of a first year associate at a top NY law firm. My husband came out with over $100,000 in loans. Fortunately we both had well paying jobs and repaid the loans in pretty short order, but had either of us wanted to take a public service job or something not as lucrative, that would not have been an option.