Center for Personal Financial Management

Student loans and borrowing: how to manage

By Grant Johnson | April 4, 2024


It is normal for any college student to wind up in a situation where they have debt or are considering borrowing more money to pay for their school, living, or even car expenses. What helps is to know where to borrow, and how to make sure that the borrowing does not become too much to the point where it is nearly impossible to pay back.

Student Loans

The best way to handle student loans is to make sure that you are keeping track of what and how much you owe and who you owe to. “Whatever you do, you do NOT want to stop paying your student loans — or even pay them late. Timely loan payments are essential to building a good credit history and defaulting on federal student loans carries extreme consequences: The government can garnish your wages, withhold tax refunds, and deny future benefits like Social Security” (Weliver, 2021). Student loans can have huge consequences to your credit if you do not pay them on time or even at all. It is always a good idea if you are in a comfortable position in your job to pay them early or even while still in school. Even if all you are doing is paying down the interest on them that is much better than having the interest build on itself.

Given how much or how little you have there are many different strategies for paying off student loans effectively. If you have a small amount of student loans, then the best advice is to get them paid off as quickly as you can. If you have a large amount of student debt a good strategy would be an income-driven repayment plan. You should switch to an income-driven repayment plan once you hit the “critical horizon,” which the researchers define as “the time at which the benefits of forgiveness match the costs of compounding” (Friedman, 2021).

Managing Loans and Borrowing after College

Some of the best plans to manage borrowing and loans is to give a lot more and live less now to get a lot more back in the future. Paying off student loans early gives so much financial freedom and gives you the opportunity to save more and spend more on other things you would rather spend your money on. Some of the best ways to save money are to:

  1. Move back in with your parents to save money.
  2. Get a second job for increased income.
  3. Consolidate Loans.
  4. Not paying the Minimum Payment.

Staying on top of student loans and limiting borrowing is the best plan to maintain financial freedom and keep yourself from following into paying enormous amounts of interest for years. Doing simple tasks and savings goes a long way in managing debt, and they are crucial habits to maintain when going through the financial hardships in life when trying to manage how much to borrow and how much to pay back and when.

Grant Johnson, Peer Coach, Center for Personal Financial Management


Weliver D. (Nov. 9, 2021). How To Pay Off Your Student Loan Debt. Money under 30. Retrieved November 30, 2021, from

Friedman, Z. (June 28, 2021). This Is The Best Way To Pay Off Student Loans According To Math. Forbes. Retrieved November 30, 2021, from

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