5 Ways Student Loans Affect Your Life

College is a major life event as well as being a pivotal financial event. The decisions made regarding paying for a college education can significantly impact your financial future.  It's important that you carefully consider all of your options for going to college and balance out priorities. In the blog post, The College Scandal: Why You Need to Have a Family Financial Meeting, I discussed the need to have a family financial meeting.

The following is a guest blog post from Susan Ranford that looks at how college loans impact your future financial life.  A big thank you to Susan for this post.

Many people spend their whole lives preparing for college. Those that don't, often spend their time caught up in school and life at university. There's usually not a lot of time spent preparing for life after college.

As a result, this is usually one of the biggest adjustment periods for young people. They usually have to deal with transitioning to a different place to live, a different job, and even leaving friends and family.

But, one of the biggest adjustments for people leaving college is dealing with their finances. Once college is over, many students have to deal with higher accommodation costs, a wide range of bills and saving money. Many student loans often truly kick in during this period too.  

These loans are notorious for affecting the finances of those who've gotten them to go to college. They are also extremely common among students too. The vast majority of students who leave college still have a substantial amount to pay off from their student loans. But, they can impact other aspects of your life too.

Below, we outline a few ways student loans can impact your life, and how to mitigate the impact in each case. Hopefully, this should make your journey after college more enjoyable and less stressful.  

1) They can (sometimes) make it harder to get other loans

In many instances, if you're applying for another loan, having others outstanding can decrease your chance of getting approved. But, this is not true of all cases. In the instance of government-backed loans, many banks will overlook outstanding loans or debts.

Student loans fall into this category. So, while you may have to be smarter when applying for loans and pick your bank or institutions better, it shouldn't be a deal-breaker from you ever getting approved for a loan again.

2) They will raise your cost of living

This may seem like an obvious addition to this list, and one that doesn't need mentioning. But, you'd be surprised how many college-leavers forget to factor in their student debt when making decisions on where to live and what to buy.

This is particularly true for people who don't have to start laying off their student loans until after they graduate. They can often continue the same lifestyle and spending habits they had in college. All the while forgetting the new bill they now have to pay each month.

So, make sure you factor in your student loan repayments when making any big financial decisions.

3) They can affect your health (if you allow it)

A lot of graduates cite their student loans as a major source of stress in their life. Higher stress levels are associated with decreased mental health. It can even affect physical aspects of your health by raising cholesterol and blood pressure.

Unfortunately, higher stress levels will do nothing to reduce your debt. So, the best solution is to manage your stress levels and try not to worry too much about your loan repayments. You can always refinance your loans or reach out for help. Always remember, you're not alone when it comes to repaying your student loans.

4) They will make budgeting and saving more important

When in college, a lot of money goes towards having fun first, and financial stability second. This can often lead to many students becoming lax when it comes to budgeting.  

But, as you transition to a full-time job and more responsibilities like mortgages or kids, this will need to change. You're spending choice will now have a long-lasting impact on yourself and others. So, budgeting will need to become a priority. Saving money for a rainy day, and retirement will also need to be done to help keep yourself financially secure.

5) They can turn others off the idea of going to college

The impact student loans have is not always limited to those who take them out. Many young people are getting discouraged from pursuing a college education because of the effects student loans can have.

But, it is important to remember that getting a degree can permanently improve your earning potential. Also, student loans can be manageable if handled the right way. Some students even manage to pay them off by the time they've left college.

So, approach student loans smartly and keep tabs in them early. This way, you can enjoy a college experience and education while minimizing the impact of loans on your life after university.


Susan Ranford is an expert on career coaching, business advice, and workplace rights. She has written for New York Jobs, IAmWire, and ZipJob. In her blogging and writing, she seeks to shed light on issues related to employment, business, and finance to help others understand different industries and find the right job fit for them.