Repaying your Student Loans: 4 Tips to help you Manage your Finances

You know the conventional wisdom: individuals who pursue higher education will ultimately have to repay the cost of their degree.

However, here’s a shocking new fact:

Recent reports have suggested that this is not always the case. According the opinion of one senior civil servant, 40% of all new loans issued to students are unlikely to ever be repaid, thanks in part to an unstable job market and a lack of opportunities for graduates.

Under British law, graduates are only required to begin repaying their debt once their earnings have reached a certain threshold. This is to avoid a scenario where individuals are encumbered with unmanageable levels of personal debt. It also minimizes the impact that economic decline has on graduates and qualifying students.

Does that mean you can just kick back and take it easy with your student loan repayments? Heck no! There are steps that each individual student can take to help repay their loan as quickly and as efficiently as possible: 

1. Compromise when Choosing your Degree Subject and Field of Study

Okay, this only really applies if you haven’t started studying. But I thought I would include it here for the more conscientious of us that want to make plans before they start studying.

When selecting your degree subject, we are always drawn towards topics that interest us and excite our imagination. While this is encouraged, it is also important to temper this according to how much your course of study will cost (for example, pursuing a degree in medicine will be many times more expensive than a liberal arts degree.)

Another consideration is whether you can make money in your chosen career. After all, there is little point in selecting a topic that has no affiliation with a specific industry, while you may also look to avoid studying subjects that are related to declining market sectors.

Your ultimate choice may have to be a compromise, as you look to balance passion and interest with common sense.

2. Understand your Financial Commitment

While a student loan may be unsecured and boast much less stringent terms than alternative forms of credit, it still needs to be considered in purely financial terms. It is therefore important that you fully comprehend your financial commitment, paying particular attention to your cumulative debt total and the terms regarding its repayment.

This can help you to determine all future costs and the potential ROI (return on investment) of pursuing higher education, which may in turn help you to determine the right field of study for your future.

Using a student loan calculator, you can predict how much you’ll be repaying per month. This will set a “hurdle” amount that you must cross with your income. The important factors to consider are:

  1. Over how many years you will be repaying the loan
  2. How much can you afford to repay per month

3. Spend Frugally at All Times

When we apply for loans in general, we tend to borrow the exact amount that we need and spend this accordingly.

Student finance is different, because individuals are applying for a predetermined amount of monthly disbursements that may be more or less than they require. If your student loan tends to pay you more than you require, you should look to save this in a separate account that can contribute towards future repayments. If you find yourself struggling, however, you should refrain from applying for additional long-term credit and instead consider lower-cost lenders such as Smart Pig.

4. Look out for refinancing deals to better you current lender

It’s tough work, but being aware of refinance student loan programs and their rates can really help you here. If you’re finding your current repayment terms too onerous, scouting around for refinancing deals can help.

You might find that your interest rates are reduced tremendously. Some programs consolidate your loans, this helps you to make one single payment every month. It might not seem like a big deal. But for some of us with many lenders – it can mean a lot less work!


No one like student loans, but they are necessary many a time. You shouldn’t try to avoid it. Instead you should do your best to manage it so that it doesn’t get out of hand.

I hope the tips above will help you with your student loans. Let me know how it goes!