Student Loan Cost After Graduation

One of the main reasons that I started this blog was to prevent others from repeating the same mistakes that I did. If we can learn from others or help out others, why not do that? One of the reasons that I did end up with such a large student loan balance was the fact that I really never had any bills to pay, and I didn’t understand how my student loans would translate as a monthly expense. This doesn’t excuse any of my decisions or choices, it’s simply the truth. I had never taken a personal finance course in high school, and everyone basically told me to go to my school of choice. The intentions were good from all sides, but I could have been more informed to make a better decision. I’m hoping that I can help others make a more informed decision with an Excel spreadsheet I have created.

My parents were relatively frugal, but they also carry debt and they don’t budget to see where their money is going or where they could cut spending. Neither of my parents went to college, so when it turned out I was good student and got good grades, the obvious push was for me to go to college. Guidance counselors, friends, parents, and me all agreed that was the best path for me. I applied to about 5 schools and I believe I got accepted into all of them (I didn’t apply to any real “reach” schools but they were all “good” schools). My top school offered me ZERO financial aid, so that was a quick decision of no – at least I made one good financial choice!

I ended up deciding between two schools, and I actually chose the more expensive one at face value. They offered me more aid so in reality it was the cheaper school, but I was still going to have to take out around $15,000 in loans a year. Never once did we research that I could have went to community college for free, and then transferred to my school. There was a specific program in place that would have all my credits transfer, and this was to a “prestigious” private school! I also ended up switching majors (which I don’t regret one bit), but that added on another year of loans.

If I had gone to community college, or even applied to a much cheaper state school I probably would have graduated with around $40,000 in loans and not the $83,000 I graduated with instead. I’d most likely be debt free right as this very moment. But we can’t go back and change the past, and that is not the focus of this post. The reason that I never saw $80,000 as a problem was because I only looked at a year by year basis. I also entered school before the recession and counselors and everyone was touting $65,000 starting salaries coming out of my school. When they said those numbers, $80,000 really didn’t seem like a big deal.

Then 6 months after graduation, I received that first bill in the mail. Over $1000 a month of my income would be dedicated to paying off my loans. How would I ever move out? Ten years of paying of paying off student loans? Would I EVER pay off my student loans? After taxes, healthcare, eye care, and dental deductions – your take home pay is not what your actual salary is!

To help others about to enter college, I’ve created a spreadsheet that solves this exact problem. You can research starting salaries in your field or job area, and then using the spreadsheet you can find your estimated monthly income – your actual take home pay. Then based on the amount of student loans you are taking out the first year, you multiply that by 4. That represents an estimation of the total amount of loans you will have upon graduation in 4 years. You can then use the spreadsheet to find your estimated monthly payment on that amount of student loans.

Find your starting salary, and then below it will be your monthly take home pay. Place that into the yellow cell

The estimate is based on an average student loan interest rate of 5%. If your loans are higher interest, you will probably be paying about $10-20 more per month and if lower, it will be the exact opposite. This will then show you a good estimate of how much of your monthly take home pay will be eaten up by your student loans. But unfortunately those aren’t you only expenses,, so I wanted to be able to show an even better picture of how student loans will affect you upon graduation.

If you are going be taking out $10,000 in your first year of college, your total student loans would be $40,000 with a monthly payment of around $424

The section below that has some basic monthly expenses provided, so you can truly see how far your paycheck will go. There is also a section to provide your own expenses, as I know those can differ greatly depending on what area of the country you live in, how often you eat out, how frugal you are, etc. If you have a good amount of money remaining each month, you’ve made a good decision financially. If you have very little remaining each month, or if your budget comes out negative it might be wise to check out a more affordable college!

Some “average” expenses are in the first row, or you can fill in your own in the yellow cells. Down below you can see the final amount using both sets of numbers.

You can download the excel spreadsheet right here. Please share this spreadsheet with anyone you know that is currently looking at colleges, especially if they are going to be taking about a substantial amount of loans. There are affordable options out there, and the quality of the education is just as good! Let’s help drive down the amount of student loans by educating people on what exactly they are getting into.

Image Source: Snapographic


  1. I really wish that this topic would be mandatory in a grade 11/12 class. Along with information on balancing a budget, mortgages, RRSPs. I’m sure I would have groaned at the time but I would have been glad if I had not made the financial mistakes that I did in university (like using my student line of credit to buy drinks at the bar…whoops..)

    1. Yeah, I’m sure I wouldn’t have fully paid attention to class in high school either. But maybe when I was comparing the cost of college I would have hopefully remembered something in the back of my head. Even if only a few students paid attention, maybe they could also help steer their friends in the right direction.

  2. I almost completely avoided student loan repayment with any vigor for the first 7 years, deferrals, forbearance, and minimum payment/income sensitive were the norm. A spreadsheet or any bit of knowledge is better than zero.

    1. I’m hoping that even if I can help one person have an “Oh crap!” moment when they realize that $90,000 of debt really isn’t feasible with a starting salary of only $40,000. The more knowledge people are armed with, the better decisions they can make. People don’t have to go to the most expensive private school to get a quality education.

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