Avoiding Student Loan Strain: What to Know

September 3, 2025 | Financial Education, Loans
Image Of College Student Smiling

College is a major investment, and for many students, that means taking on student loans. But borrowing too much can have long-term financial consequences. With September recognized as College Savings Month, it’s a timely reminder that planning ahead can make a big difference. According to Best Colleges, the average monthly federal student loan payment for a bachelor’s degree on a 10-year repayment plan is around $336, illustrating the importance of borrowing only what you truly need – not just what’s offered.

Student loans can be a helpful tool, but they should be used wisely. Students should consider the full picture of college costs and what repayment might look like after graduation. Here are a few tips for borrowing smarter:

  • Know your total costs – Tuition isn’t the only expense. Factor in housing, food, transportation, books and personal expenses. Subtract any scholarships, grants or work-study income before deciding how much to borrow.

  • Do your homework on loan terms – Not all loans are created equal. Before accepting any offer, understand the interest rates, repayment timeline, grace periods, and whether the interest will accrue while you’re in school. Taking the time to compare your options now can save you thousands of dollars later.

  • Keep future income in mind – According to Saving for College, a good rule of thumb is to borrow less than your expected starting salary after graduation. This helps ensure monthly payments will be manageable. Also keep in mind expenses will increase once you finish college, so be sure the student loan payment is affordable.

  • Borrow only what you need – You don’t have to accept the full amount offered in your financial aid package. Use budgeting tools to determine how much is truly necessary to cover costs.
  • Use loan simulators – Online calculators, such as the one from the Federal Student Aid office, can help students understand what repayment might look like and how long it could take based on different loan amounts.

Borrowing wisely and planning ahead sets students up for a stronger financial future. Taking the time now to understand loan options and budgeting carefully can prevent unnecessary debt and make repayment manageable after graduation.


We’re here to help families plan for the future with confidence. Whether your child is just starting kindergarten or heading into their senior year of high school, it’s never too early—or too late—to start saving for higher education. 

At Northwest Bank, we work with Iowa Student Loan (ISL) Education Lending* to offer private loans to help you pay for college as well as refinance existing student loans. ISL Education Lending offers:

  • Loans for college students.
  • A loan option for parents and family members who wish to borrow on behalf of a college student.
  • Multiple student loan refinance options.

In addition, they offer multiple scholarship opportunities and free college planning tools to help students and families avoid overborrowing and plan smart for life during and after college.

Our team is dedicated to providing guidance, tools, and savings options designed to make college goals more achievable. Let’s build a brighter future together, one step at a time.

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