Undergrads Worried About Repaying Student Debt


Between the uncertainty of the federal student loan payment pause, student loan forgiveness and a struggling economy, many college students with debt are worried about what life will look like after graduation. With undergraduates leaving college with an average of $28,400 in student loan debt, it’s understandable that there’s a lot of fear around the future.

The latest Student Loan Hero survey of more than 1,000 undergraduates finds that 73% of those with student loans are stressed about repaying them — and an even higher percentage of these undergraduates (82%) don’t know what their monthly payment will be.

Here’s what else our newest survey uncovers.

Key findings

73% of undergraduates are worried about repaying student loans

Nearly 3 in 10 (29%) undergraduates could miss out on various forms of financial aid — from grants to federal student loans — because they or a parent didn’t fill out the Free Application for Federal Student Aid (FAFSA) for the upcoming school year. Among this group, 17% say they’re planning to do so.

But when it’s time, repaying student loans places a lot of stress on undergraduates. Almost three-quarters (73%) of undergraduates with student loans are at least somewhat worried about their ability to repay debt. Women, in particular, are more worried than men — 77% versus 68%.

LendingTree chief credit analyst Matt Schulz says it’s understandable for students to feel this way amid rising inflation and fears about a potential recession.

“It makes all the sense in the world to be worried about your financial future right now,” Schulz says. “These are crazy, unpredictable times, the likes of which we haven’t seen in decades. It makes people feel powerless and scared because everything seems out of your control.”

These undergraduates with student loans owe a lot, too. More than half (54%) owe $15,000 or more, including 2% who owe more than $100,000.

More than 7 in 10 (71%) undergrad borrowers use these loans for expenses beyond tuition. The most common expenses outside of tuition that borrowers fund with student loans include room and board (39%), textbooks (37%) and food (22%).

This can contribute to future uncertainty, as 82% of undergraduates with student loans don’t know what their monthly payment will be when federal payments resume. Among this group, 52% have a vague idea and 30% don’t know.

Planning and making a budget for your student loan repayments could relieve that stress. Learning more about what to expect before you start making your monthly payments can provide insight into your repayment options.

“One of the best things you can do is take steps to wrestle back a little bit of control,” Schulz says. “They may be small. They may be stressful, difficult and maddening. However, it’s crucial to act and not just hope your problems eventually go away.”

Pay attention to financial aid options (and who can help)

What students receive or don’t receive in financial aid can especially impact their ability to afford their postsecondary education and, eventually, their student loans.

About 4 in 5 (81%) of those who filled out the FAFSA say they received financial aid beyond student loans, such as grants or scholarships. The majority of undergraduates who received financial aid besides loans get less than $15,000 a year (55%), though anything helps. About 1 in 4 (26%) undergraduates say they haven’t received any financial aid beyond loans.

These students might benefit from a visit to their college’s financial aid office — something that just 50% of undergraduates have done. Of the students who visited their financial aid office, 69% were counseled about how to apply for scholarships and grants. Nearly 4 in 10 (39%) say they got basic personal finance information, while a similar 38% cite learning the differences between federal and student loans.

Seeking financial support by filling out the FAFSA or making an appointment with a financial aid advisor at your school can play a vital role in your ability to afford college and can help lessen the amount in loans you may have to take out.

As the math would have it, the less in student loans you have to take out, the less you’ll eventually have to repay.

Student loan borrowers are more likely to accrue extra debt and struggle financially

The survey also finds that students with student loans are much more likely to apply for additional forms of debt than those without student loans.

In fact, 26% of students with loans took on credit card debt, while just 13% of students without loans did. That means undergraduates with student loans are twice as likely to get a credit card than those who didn’t have to take out loans.

Overall, 39% of undergraduates with student loans have other forms of debt under their belts, compared with 21% of undergrads without student loans who did.

“Those who need a student loan to help them pay for college may also be more likely to need a credit card to help them pay their regular expenses,” Schulz says. “Meanwhile, those who didn’t need a student loan may not have needed a credit card either. They or their families may have the financial means to allow them to get by without leaning on plastic or student loans.”

However, taking on debt such as a credit card while in college isn’t necessarily a negative thing, Schulz says. If you use credit card debt wisely, it can be what he refers to as “good debt” for college students.

“Good debt is debt that ultimately brings a strong return in the future,” Schulz says. “If you use credit cards to take classes to boost your skills, buy clothes that can help you ace your next job interview or start a small business, card debt can work for you.”

But it isn’t something to enter into lightly, Schulz warns.

“A little bit of debt for a little while is one thing,” he says. “A mountain of debt for years is something else.”

Nearly a quarter of undergrad students say they struggle to cover expenses, especially student loan borrowers (29%) and women (27%). However, 22% say they feel financially comfortable, which rises to 28% among those with no student loans and 27% among men.

More than half of college students receive at least half their financial support from their parents

During college, many students are supported financially by their parents. However, support isn’t always equal.

More than half (55%) of students say their parents cover at least half of their college expenses. This rises to 62% among students without student loans and 65% among undergraduates whose parents both attended college.

In some cases, parents can’t contribute enough funds to cover a student’s expenses, if at all. About 1 in 5 (19%) undergraduates don’t get financial assistance from their parents or guardians, making it more difficult to afford school. It may also require them to take on additional forms of debt or a job.

This parental support is key at times, as 27% of undergraduates say their yearly out-of-pocket expenses (including student loans) for college are $20,000 or more a year. This figure can include tuition, room and board, textbooks and other necessary expenses.

To help, more than half of undergraduates (55%) say they worked part time and attended school full time. Nearly a third (30%) of students say they haven’t worked while attending school.

Further, the survey finds that students with loans are more likely to work while also taking college classes. In fact, a third (33%) of part-time students say they took a lighter class load so they could still work, compared with 12% of full-time students.

First-generation college students among those that face the most financial challenges

There is a particularly large gap between the financial struggle of students whose parents went to college and first-generation college students.

In many cases, students who are the first in their families to attend college face more financial struggles than those whose parents both attended college.

Our survey finds that first-generation students are more likely to struggle financially than students with parents who both attended college (30% versus 18%).

This may make sense in light of our survey showing that first-generation students are much more likely to say they don’t receive financial help from their parents (29% versus 13%).

We also find that first-generation students are more likely to take on credit card debt (24% versus 14% of students whose parents attended college), perhaps to bridge that gap in financial support.

On top of that, we find that those with parents who both attended college are the most likely to receive merit-based financial aid. Here’s how those percentages stack up based on merit-based aid:

This creates a lot of financial difficulties on top of all the challenges many students already face. In these challenging situations, Schulz recommends that these students work hard to advocate for themselves.

“The extreme cost of college creates an incredible burden on students today, far beyond what previous generations faced,” Schulz says. “Unfortunately, it’s up to individuals to turn over every rock and look around every corner to find as much help as they can in terms of scholarships, grants and other financial assistance. No one’s going to do that for them.”

Is student loan forgiveness in the future?

While there has been quite a bit of talk around potential student loan forgiveness and another extension of the student loan payment pause (which is currently set to end Aug. 31, 2022), there’s still a lot of ambiguity around the future of student debt.

Despite this uncertainty, many college students are optimistic about the chances of student loan forgiveness. Six in 10 (60%) undergraduates believe they may see some form of debt forgiveness, and students’ confidence around this possibility is growing. In fact, 45% of students think loan forgiveness is more likely to happen now than two years ago, when President Joe Biden began his term.

However, many students are still feeling cautious. Most college undergrads (86%) haven’t let their idealism surrounding student loan forgiveness impact their borrowing decisions.

This approach may be wise, as none of us have a magic crystal ball we can use to tell the future. In the meantime, Schulz has some advice for students preparing to start making payments.

“Individually, these things may or may not move the needle much for you financially, but they’re a start, and they might just motivate you to another step in the future and then another,” Schulz says. “Over time, those moves can have a real impact, but only if you take that first step.”

  • Create a budget or update your old one. Budgeting can give you an idea of where you stand financially. It can tell you what you can and can’t afford as well as what you may need to cut out of your budget. 
  • Refinance and consolidate your other debts. Debt consolidation can help you find lower interest rates for your loans and help you manage your debt by rolling it into a single loan.
  • Sell something of value you can do without. Selling your things can be a good way to declutter your home and earn some extra cash. For instance, many sites allow you to sell your old textbooks
  • Slash some expenses. Everyone enjoys splurging a bit. But if there are extra expenses you’re shelling out for that no longer serve you, consider cutting those. This could mean eating out less or even living off campus to save money on room and board.
  • Consider a side hustle. Getting a part-time job could help cover some of your college expenses. Keep in mind, however, that this may not be feasible for every student depending on their academic workload.
  • Take care of your health. One of the most important things, says Schulz, is to take care of yourself physically, mentally and emotionally. “Stressful times can take a toll on our hearts, minds and bodies, as well as our bank accounts, and health issues could make a challenging financial time even worse, so don’t treat your health as an afterthought.”

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