The day of reckoning for student loans

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Photo credit: Brooke Morrill


Between tuition, textbooks and living expenses, the pursuit of a higher education comes with a large bill attached. Although scholarships, grants, and family contributions can assist a student in paying for college, many have a difficult time personally financing their schooling.

According to a national study done by, 71% of college graduates “had student loan debt, with an average of $29,400 per borrower.” In Utah, the numbers recorded were lower than the national average and only 50% of students graduated with student loan debt for an average of $21,520 per student.

Even though half of the Utah Valley University student body will not be subject to any student loan debt at the end of their college career, the other half may find getting out of debt to be overwhelming. Not every student will land that dream career at the end of their final semester, and the deadline for the six month grace period for loan repayment will sneak up on you if you aren’t paying attention.

However, there is still hope of preparing yourself for that day when you realize that you have to start paying back those student loans. Here are a few suggestions – with some help from Money 101 – to help you be prepared as that day looms near:

• Establish a budget while you’re in college. Start by figuring out your net monthly income and then figure in what current bills you have to pay.

• Be sure to include any regular expense such as: rent, utilities, insurances, phone service, car payment, food, personal care items, gasoline, internet/cable service, entertainment, gifts/charity, savings, emergency funds, loan repayment, etc.

• Set aside money for these expenses and always round up. For example,
if your phone bill normally comes to about $46 and change, set aside $50. It may not seem like much, but budgeting $5 extra for 10 different bills is a great way to trick yourself into saving $50 more each month.

• Monitor your spending. Microsoft Excel is a great program to use to keep track of monthly expenses, and free budgeting templates can be found at under the “Templates” tab.

• Stick to your budget. It may be flawless, but if you continually tap into your bank account without consulting your financial plan, it is the same as not having one.

• After paying your bills, take what was left over of your budget for each item and put it into your savings, emergency funds, or toward loan repayment.

• Periodically (each month, or every couple of months) reconfigure your budget. Maybe you got a raise, or had budgeted more for food than was necessary and need to adjust your budgeting goals.

• Start paying now. You don’t need to wait to be asked to start paying on your student loans. Even if you can only afford $20 a month, repayment will become a habit before you graduate. Push yourself to make larger payments as you revise your budget.

Remember that the day of reckoning will come and the piper will need to be paid. However, if you establish responsible financial habits now, the task of repayment will be much easier when that day comes.