For many students, the stress of trying to maintain good grades and finish college on a strong note can be overwhelming. If the task of managing one’s finances and paying off student loans is added to the mix, the stress can sometimes become unbearable.
Although the pressures of maintaining good grades and finishing college strong can be sources of anxiety for many college students, the biggest worry they have is about money, according to a 2015 Ohio State University study.
The study found nearly 70 percent of about 19,000 college students surveyed said they are stressed about their finances, and it also found the pressures of student loan debt and finding ways to make ends meet are weighing on American college students.
In addition, the study found 24 percent of students surveyed said they expected to have between $30,000 and $50,000 in student loan debt by the time they graduate, 14 percent said they expected between $50,000 and $80,000 and 7 percent said they would owe more than $80,000.
Jeff Black, assistant professor of finance at the University of Memphis, said those with student debt should plan for the payments and never pay more than they can handle at one time.
“Paying more money sooner, rather than later, will always save money in the long run,” Black said. “Don’t buy a car and get an apartment, and then four months later, realize that you don’t have enough money to make student loan payments and eat.”
Black also said if students want to go to graduate school after graduation, they should be especially mindful of student debt.
“Undergraduate student loans have caps on how much students can borrow,” Black said. “However, for graduate programs, these caps are raised or eliminated, depending on the degree. “
With the caps on how much a student can borrow for graduate school, Black said it can lead to a lifetime supply of student loan debt if not handled the right way.
“My advice for graduating seniors would be to only borrow money for graduate school if it will lead to making more than enough money to pay back those loans,” Black said. “Think of the loans as a commitment. Once you borrow your first cent toward a law, medical or other graduate degree, then it should inspire you to finish the program, so you can pay it back.”
Black said students should try to refinance their student loans, which is the process of replacing an existing loan with a new loan at a lower rate.
“Since they fix the total number of payments, sometimes these refinanced loans have higher minimum payments, even though they save money in the long run,” Black said.
In addition, a person with student loans needs to make sure they can afford the minimums before making a money-saving move like refinancing, Black said.
“Lower interest rates and paying more money sooner will always pay off loans faster, if the graduate can afford to make the payments,” Black said.
Black said a good way for graduating students to save money is to move back home after graduation.
“There is no financial downside to living with your parents unless they’re charging you rent similar to your outside options,” Black said.
Matthew Quick, 22-year-old biomedical engineering junior, said he plans on moving back in with his parents to pay off his loans after he graduates next spring.
“I will graduate in May of 2019 and will by then have $12,000 to $16,000 in debt to student loans,” Quick said. “I plan on moving back in with my parents for two to three years to pay off my loans and reinvest excess income into rental properties while working and going to graduate school, which will hopefully be paid for by the company I work for.”
Courtney Carpenter, a recent graduate from the U of M, said she finished undergraduate study without any debt, but going to graduate school for speech pathology may be a little different.
“It is likely that I and my soon-to-be husband will both have debt from grad school,” Carpenter said. “Juggling marriage, school and work is certainly overwhelming but so rewarding.”