My kids took out subsidized loans up to the max they were allowed, and I took out PLUS loans. The PLUS loans were my responsibility and I paid them off after my kids graduated. Both my kids were employed & self-supporting immediately after college grad, so paying down the loans wasn’t difficult-- I just shifted the dollars in my budget that had gone toward supporting the kids to paying off the loans.
My daughter & son took out loans on their own for grad school; I did not contribute. Both had worked for several years between undergrad & grad, so had established employment histories and a pretty good sense of what they could manage.
I looked at the parent PLUS loans as a way of financing my end of the deal, not extending beyond what I could afford. I would not have borrowed an amount that put my own financial security at risk. I looked at my own net worth in terms of figuring out what I was willing and able to borrow.
I did not ask my kids to take out unsubsidized loans. A limited amount of money at -0- interest while they were in school seemed like fair deal, especially since they were choosing more costly options than the in-state public would have been. But the federal limits on subsidized loans seemed to me to closely equate with the maximum that I think most undergrads should take on. I didn’t look at it in terms of how much they might be able to earn post-college-- I looked at it in terms of what their earning capacity would have been at the time they took on the loans, if they weren’t in school – together with what the monthly payment would be on the loan.