When Further Education Leads To Further Debt

when further eduction leads to further debt

The path is laid out for us as we grow up. Go to school, study hard and get accepted to university. No problem, right?

But the final stage of that plan, university, can lead to serious financial troubles. Enormous student loans and dim job prospects upon graduation can lead to a stubborn debt that is difficult to escape.

Tanya H. was one of the victims of this debt spiral. She graduated from university but that was just the beginning of her descent into debt.

Debt became a problem when I had graduated from university,” says Tanya. “I moved across the country and started working at a temp agency but I could only count on earning money a couple days a week. Before long, I had to start paying back my student loans without a steady income. I often had to use my credit cards to make the monthly payments.”

It took Tanya many years to repay her debts and become financially stable. We’ll check in with her in a bit but first…


To ensure that you avoid the same debt trap that ensnared Tanya, Consolidated Credit has compiled some tips for those just starting out in the world.

Work and study

Many young people are blown away when their student loan gets deposited in their bank account. It may seem like you have enough money to do anything you want…but you need to realize it’s not really your money. Since you have to pay it back eventually, you should consider getting a part time job while you study. The income you earn can go towards living expenses so your student loan can be applied just to your tuition payments. With a little hard work, you’ll end up with some of that student loan leftover when you graduate…which will help you to…

Don’t wait, eliminate!

Most student loans have a grace period after graduation where payments don’t have to be made. This period allows you to find a job and start earning money…which you can then put towards the loan. But, you don’t have to wait the six months to start making payments. If you get a job quickly or have enough money in your bank account when you graduate, directing it towards your loan in the form of a lump payment could be a good idea. This will decrease the principal, shorten the term and lower the amount of interest you’ll end up paying. But, if you don’t have the funds available to make a lump payment, just…

Make it automatic

Making a payment on your debt isn’t something you should choose to do each month. Take it out of your hands by utilizing auto-payment features with your bank. This way, the payments become invisible and you’ll never be late or miss a payment. Sticking to a payment plan will keep you on the right track and help you get rid of the debt faster.


These days, Tanya is debt-free and excited for the future. It was a long road to debt freedom but she was able to overcome the many obstacles she faced. By going through these tough times, she learned a lot about herself and a lot about managing her money .

“After eliminating my debt, I make a conscious effort to see where my money is going. I put money away each month even if it means I need to cutback on something else that month like a dinner out,” says Tanya. “I have a budget and I stick to it.  It took a while to break my spending habits but it gets easier each day. I’m happy that I don’t feel stressed and embarrassed like I did before calling Consolidated Credit.”

So, take the lessons that Tanya learned and apply them to your life. This way, you’ll be able to stop a debt problem before it even starts. Good luck!


    • Corina Ramos

      Corina Ramos 07/30/2014 9:48 a.m. #

      Great tips Jeffrey.

      My daughter is going into her Senior year in high school and she has her sights set on Texas A&M.

      We've talked about the expenses and she is working hard on her GPA and applying for as many grants and scholarships to cover the costs. Of course, if all else fails we'll have to get a loan but we are going to take advantage of all our options before then.

      I used to not be comfortable with automatic payment withdrawals but now that I use it, it does seem like the payment isn't there. :)

      Thanks for putting these tips together. Have a great day!

      • Sicorra

        Sicorra 07/31/2014 9:39 a.m. #

        Hey Corina,

        I hope your daughter is able to receive grants and scholarships to help with the cost of her education. That would not only help her, but all of you, as it will be expensive. It is great that she plans to pursue college and I wish her much success.


    • Shannon @ The Heavy Purse

      Shannon @ The Heavy Purse 07/30/2014 11:52 a.m. #

      This is key, "Many young people are blown away when their student loan gets deposited in their bank account. It may seem like you have enough money to do anything you want…but you need to realize it’s not really your money" I see this so often, It's seems like such a windfall and kid think about now, not later. It's important as parents, we help them understand this AND not take a penny more in student loans than we need. Get a part-time job to pay for fun stuff, like spring break and nights out. Don't pay for it with your student loans.

      • Sicorra

        Sicorra 07/31/2014 9:41 a.m. #

        Shannon, I can imagine how a person would feel once all that money is dropped into their bank account. It would feel like winning the lottery and it would take a lot of self discipline to manage it well.
        Students that understand that it is borrowed money will have the advantage, and if they have parents that can educate them on how to manage it well, so much the better.

    • No Nonsense Landlord

      No Nonsense Landlord 07/31/2014 9:24 p.m. #

      Always wait for grad school until you find a job. Your new employer might pay for it for you. And if you ever go below full time, your loans may become due, so don't do that.

      Borrow the minimum. The less you borrow, the less you pay back. Look for deferred interest loans, not accrued interest loans.

      Work part time at the school. Easy job, easy money. restaurant jobs generally pay pretty well with tips, and are great college jobs.

      And you can join the military for a great way to get free college. It's a very viable option.

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