5 Ways College Debt Can Affect Student Future Lives

Does College Debt Affect The Future Lives Of The Students?

Many students rely on loans to finance their college education. This includes students from all income groups. The loans are good because they enable students to achieve academic goals. The problem is that college debt has a negative impact on students’ lives in the future.

They make it hard for students to buy homes, borrow credit, secure jobs and achieve their career dreams. So, students should take control of their loans to reduce their negative impact. This includes creating a budget to cut expenses and looking for extra income.

Why Do Students Take Loans?

Students borrow loans for different reasons.

  • Firstly, paying for increasing school fees. Most students cannot afford college fees. They rely on loans to finance their education. Almost 70% of college students need to borrow to finance their studies. People think that only students from low-income families borrow. This is not true. Even students from middle and high-income families borrow.
  • Secondly, the low-interest rates of students’ loans. Again, students don’t have to repay these loans until they start earning a certain amount. This makes these loans more attractive.
  • Thirdly, students take loans to invest in the best careers. They use loans to achieve their career goals. Fourth, students borrow to cater for living expenses. Maintenance loans provide a better living standard.
  • Fourthly, students take loans to reduce worry over rent and other expenses.

Effects of borrowing on the lives of students

Remember, borrowing comes with some goodies. You pay your fees, rent, and finance other activities. It helps in living a smooth life in college in terms of finances. But how will this affect you in the future? Even a small loan will definitely be a problem in the future if you land a low-income job. Let us then look at some of the effects of borrowing in the future

  1. Living at home

Students invest in higher education expecting to live a better life in the future. This may somewhat be possible. But, having debt can ruin this dream. Firstly, with a debt, you may have to forget owning a home. Student debt makes it so hard to save enough money to buy a home. This therefore means even affording a down payment to buy a home through monthly payment is a problem.

If you have a bigger debt, even renting a house is a problem. This is a reality in major cities where houses are quite expensive. Paying that rent can be a challenge for most young adults. So, you end up living at home with parents or other family members.

  1. Career choice

Student debt affects career choice. Marcos is a college graduate. He always dreamt of working with non-profit organizations in developing nations. Just like other students, Marcos borrowed to finance his college education. He also had over $30,000 in loan debt. He was however lucky enough to find the dream job in a non-profit organization. The problem was that the salary could not help cover the loan and take care of his financial needs.


He had only one bitter solution, decline the job offer. His dream job became a distant memory. He also ended up in a better paying job, not his dream job. ‘I earn a higher salary. But I am not satisfied with my current job. I hope to get into my dream job after I am done paying my loan,’ Marcos says.

  1. Lowering credit score

Even with a good job, you may need credit to buy something like a car. However, the credit score will determine if you get the credit or not. A negative score hence reduces the chance of getting credit. How does this relate to student debt? Student loans are treated as other installment loans. If you fail to make timely payments, your credit score is negatively affected. This means that in the future, consequently lenders may not give you credit.

  1. Missing job opportunities

Some companies conduct background checks before hiring. This includes checking credit status. If they detect any problem such as late payments, they may disqualify the applicant. This shows how bad student debt affects life after school. Next time you think about the loans, think about the potential effects in the future. The problem is that student debt will not go away. Some types of debt go away if one can’t afford to pay. For example, you can return home to the bank if paying becomes a problem. You can also return the car to the dealership if you can’t afford the payments. This doesn’t apply to student debt.


  1. Limits retirement savings

Student debt limits retirement savings. This is because you will have less money to save. Some students can hardly cover their monthly loan repayments. How can they afford retirement savings? They can only afford delayed retirement contributions. This means delaying the benefit of retirement interests.

Key takeaways

Student loans are good while at school. But the loan may have negative effects on your life in the future. What should I do to pay the debt now? First, create a budget to limit expenses. This can help save some more money to pay the debt. Second, look for extra income. This means looking for a part-time job or jobs. This means reducing leisure activities. But it should not be a problem. You can have as many leisure activities as possible after you are done paying the debt. Third, don’t miss any payment. Always ensure you make your payment on time.

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