College Connect: Coping with student loans

Posted By David Wilhite

By Kaleigh Galvin

When it comes to the infamous juggling act of college life, Andrew Dugan, 21, has been forced to become a master. On top of a full course load, the fourth-year religion student works 25 hours a week on campus to fight the looming reality of student loans, while also maintaining heavy involvement in his local church.

“My biggest sacrifice is personal health,” he said. “There have been multiple weeks this semester alone that I have averaged thirty hours of sleep – maximum.”

The stress of financial independence has been weighing on him for too long, and there are questions he wanted answered. We sat down with University of Georgia professor Heidi Ewen to gain some insight. With a background in psychology and aging, particularly in the context of consumerism, Ewen knows how to establish a healthy financial lifestyle designed to stick with an individual throughout all of adult life.

Dugan: How do I overcome the fear of student loan debt that I currently have?

Ewen: I think we all have that feeling. Even on the undergraduate level, I think most of us have come out with loan debt. But most financial planners will tell you that there’s good debt and there’s bad debt. The education is definitely the good debt, because it pays off down the road. And I would be lying if I said that nobody was afraid of it. I mean, anytime you’re getting into debt, it’s scary. But what you are paying for with that money is really something that’s going to benefit you for the whole of your life. I think keeping that in context will help (you) cope with it.

Should I start paying off student loan debt now or wait until I have to?

There are so many factors involved in that. It all depends on who you have your loan through – federal or private. You’re pretty much going to pay the interest on that whether you pay it off early or take some time to do so. My advice would be to wait until you feel like you’re able to do it. And most of the repayment plans will start out at graduation anyway. You start off with a small payment, which will increase as your income does. It’s definitely a long haul approach – not like a credit card that you’re expected to pay off really fast. It’s a loan that’s metered and tailored to make sense for the income you have.

Since I don’t have money to spend and am consistently in the financial red, I am not living on a budget. Do you have any tips on how to get started?

It’s good that you realize that budgeting is important. It’s good to get into the practice of that early on. First off, if the education debt is all you have, you need to stop looking at it as debt. I mean, yes it’s debt, but it is so different from credit card debt, or a car payment, or any other short-term debt with really high interest rates. Once you develop a budget, it just becomes a part of what you pay every month. You can set it up on auto-pay and you don’t really have to think about it much after that. Just sit down and figure out how much you spend and on what, and put that next to what you are bringing in; and put the education debt to the side for a little bit. I can tell it’s causing you a lot of anxiety.

How do I balance not spending money with making sure I have the necessities?

Everybody wants more disposable income to spend on things that they want, rather than just what they need. And I would argue that those things that you want are still fairly important. I mean you’re a student. You work really hard, and you may want to go watch a movie or go out with friends. And the cost of all of those events can and will add up, but they need to, in some capacity, be a part of that budget. Don’t look at it as wasting money. If it gives you a reprieve that helps your mental health, if it’s just for down time, I wouldn’t even call it an extra. It becomes a necessity with your social network and your overall health.

 

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