How I Transformed My Relationship with Student Loans and Credit Cards, and How Financial Coaching Can Help You
- Devin Isabella
- Jun 22
- 4 min read
As I started my college journey, I was filled with excitement, but that quickly turned into anxiety. Student loans and credit card offers bombarded me from every direction. I understood the risks they posed but to many students get taken advantage of.
The Overwhelming Reality of Student Loans
Before financial coaching, I was just like many college students—under the constant stress of expanding student loans. Tuition was climbing; I took on loans without fully grasping their consequences. For instance, in 2020, the average student loan debt was around $32,900, with over 44 million borrowers in the U.S. alone. As students, we often overlook this heavy burden while focusing on our education.
Understanding Student Loan Management
I learned that managing student loans goes beyond knowing how much I owed and the vessels to success I was taught were not all they cracked up to be. Public Service Loan Forgiveness (PSLF) is the first program I learned about after signing up for my own pile of debt. PSLF is a program designed to forgive the remaining balance on federal student loans after borrowers make 120 qualifying payments while employed by a qualifying public service employer. However, I realized that there is an over-reliance on loan forgiveness plans due to the lack of available funding, which can lead borrowers to overlook other important strategies for managing their debt. Despite over 14 million Americans having student loans, PSLF has forgiven less than 1 million by 2024.
I do understand that student loan forgiveness sounds like a great option, but I believe and teach that financial success is won through smart, intentional, and hard decisions. Borrowers can explore options such as income-driven repayment plans, refinancing, and making extra payments to reduce their principal balance. These alternative strategies can provide more immediate relief and flexibility, enabling borrowers to take control of their financial situation. By diversifying their approach to loan management, borrowers can find more effective and sustainable ways to handle their student debt.
The Alluring Trap of Credit Card Offers
During college, I was bombarded with enticing credit card offers promising rewards and cashback. Those offers seemed perfect for my everyday purchases. However, I was unaware of how easily I could trap myself in a debt cycle with high-interest rates if I mismanaged my spending.
It is important to learn how to manage any line of credit. I began by analyzing my spending habits and creating a monthly budget. Instead of impulsively swiping my card, I focused on essential purchases I could pay off in full each month. This habit reduced my anxiety and turned credit cards into tools for building credit rather than sources of stress.
How Financial Coaching Can Make the Difference
Investing in financial coaching can be a pivotal moment in your college experience. It provides you with tailored advice specific to your financial goals and situation. This support can help you decode the complexities surrounding student loans and credit cards, which may currently feel overwhelming.
During your sessions, your financial coach will introduce you to practical tools like budgeting software and apps that simplify tracking your income and expenses. For example, together you can craft a comprehensive budget plan that includes your part-time job income, living costs, and savings for emergencies. This proactive approach will lay the groundwork for a stronger financial future.
Actionable Tips for College Students
If student loans and credit card debt feel daunting, here are some tangible tips from my experience:
Create a Detailed Budget
Start by listing all sources of income, including part-time jobs, and categorize your expenses—rent, groceries, utilities, and leisure activities. Tracking your spending will reveal areas where you can cut back.
Understand Your Loans
Take the time to research your student loans. Know the interest rates and repayment terms. For instance, federal student loans often have lower interest rates compared to private loans. Understanding these details will help you make informed decisions about repayment plans.
Educate Yourself on Credit
Research different credit card options before applying. Understand terms like Annual Percentage Rate (APR) and the benefits of using a card responsibly. For example, using a card with a 1% cashback reward for $1,000 in monthly expenses translates to $120 annually.
Set Up an Emergency Fund
Aim to save three to six months’ worth of essential expenses. This buffer can relieve stress and give you peace of mind if unexpected costs arise, such as medical emergencies or urgent car repairs.
Seek Professional Help
If financial matters feel overwhelming, consider financial coaching. A professional can help clarify your financial situation and provide personal strategies for success.
The Road to Financial Freedom
As I applied these strategies, my views on student loans and credit cards transitioned from fear to empowerment. Now, I confidently approach my financial choices, whether adjusting my budget or seeking guidance for more complex challenges.
Financial coaching opened my eyes to the possibility of actively managing my financial future instead of viewing debt as an anchor. It gave me the tools to build a solid foundation for financial independence.
Final Thoughts
In a world saturated with tempting credit card promotions and confusing student loan applications, financial coaching can serve as a guiding light for college students seeking direction. If you're navigating the complexities of student loans and credit cards, remember you are not alone.
Investing in financial coaching empowers you to take control of your college finances. You have the ability to shape your financial path, and it all starts with informed, proactive steps. Embrace this opportunity to redefine your relationship with money, setting the stage for a secure financial future.
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