Money Worries Now Series: Financial issues affecting students in universities and colleges

Live Well Diary Team

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financial issues affecting students

Today, a college or university education is a “must” for students who want to be successful in the labour market. However, many students face financial issues due to rising education costs during college and university.

Paying for a university or college education can be one of your biggest concerns if you are a student. Money can be tight, whether going out with friends, paying for textbooks, or buying the laptop you need to complete your assignments.

This article describes how you can handle your financial situation when you are a student up until graduation.

First, here are some common issues affecting students:

Taking on too much debt is one of the financial issues affecting students.

Students often take out student loans to cover tuition and living expenses. While this can be helpful in the short term, it can have long-term consequences if you take out too much money and pay it off slowly.

You might find yourself struggling with paying back your student loans while you’re still in school — and the interest on these loans starts accruing immediately (as opposed to other types of debt).

If there are no jobs lined up after graduation, this can put additional strain on your finances and make life more challenging than it needs to be.

financial issues affecting students

Paying for expenses

The cost of attendance is the total yearly cost of attending college or university. These includes:

  • tuition and fees
  • dormitory or accommodation fees
  • books and school supplies
  • transportation
  • personal expenses

Students who need more financial aid through loans or grants may have to pay these expenses out of pocket, which can be difficult if you’re not working during school or your family only has a little money for these.

No Emergency Funds

Another financial issue affecting students is the lack of emergency funds. Students without emergency funds often resort to taking out credit cards, which can result in debt that will follow them for years after graduation.

Lack of money can easily lead to feelings of failure.

While some of us have been lucky enough to experience financial stability throughout our lives, many others haven’t. This can lead to feelings of failure and inadequacy, which are only exacerbated by your trying to balance school with work (and maybe even a family).

Financial concerns and poor academic performance are strongly linked.

When students worry about money, they may be unable to focus on their schoolwork or even get out of bed in the morning.

Financial stress can lead to higher anxiety and depression, which are known to lower academic performance.

In addition, research has shown that struggling students are more likely to drop out of university or college altogether. If you’re dropping out before completing your degree, getting a job that pays well enough to repay your student loans without taking on additional debt is challenging.

financial issues affecting students


Stress is a huge problem for college students. It can cause depression, anxiety and other mental health issues, which can impair the ability to get an education.

Stress affects eating habits and sleep patterns, leading to social problems. Money problems can cause anxiety because of the pressure to pay for rent, food, tuition and transportation.

If you don’t have enough money, it’s easy to feel overwhelmed by the situation and feel like you won’t get through school without help from others.

Not caring about school.

In fact, it’s common for people who are stressed out financially to find themselves not caring about their studies or grades. They may also lose motivation to succeed in school.

Students with financial problems may feel overwhelmed with everything they need to do.


Pressure to get high grades, pressure to get a job and keep it, pressure to meet deadlines, pressure on assignments and exams and to pay bills. It can be challenging for students to deal with all these pressures simultaneously.

There’s a lot of pressure on students.

Loss of sleep

Insufficient sleep can lead to poor performance at school, and students are already under a lot of pressure.

Lack of sleep causes memory loss. The hippocampus in your brain loses its ability to encode new memories due to the effects of sleep deprivation. This can impact homework assignments and tests if you cannot recall details from lectures or readings.

In addition to these effects on academics and memory function, not getting enough shut-eye has also been linked with weight gain.

This may seem like an obvious connection, but there are several explanations for why this happens. When we’re tired, we tend not only to eat more but also crave sugar/sweet foods, which leads us down a slippery slope towards obesity.

Loneliness and social problems

Loneliness and social problems are common among students who are struggling with money.

Students struggling with money can experience isolation. This feeling may be compounded by students being away from home and from family for the first time and finding themselves in new environments with different people.

For example, if students cannot afford accommodation for themselves or their families, they may want to move back home with their parents but feel unable to do so.

Students with no money to spend on social activities may also find it challenging to make friends or form relationships. Some studies show that people experiencing financial hardship tend to have fewer friends than those not struggling financially.

Sometimes, having financial problems can cause people to stop spending time with their friends and family to save money. Social interactions can help us cope with stress, so it’s essential not to neglect your relationships.

How to manage financial difficulty when you are a student.

Students may be eligible for grants and scholarships targeted to those facing financial hardship.

If you’re a student facing financial hardship, many scholarships and grants are available with your education costs.

A school’s financial aid office can give more information on these programs and how to apply.

Some other sources of free money include:

  • Private scholarships award funds based on academic merit or other criteria (like being a minority). These awards are typically quite large and are not tied to the amount of debt you have after graduating from college.
  • Grants, fellowships and loans specifically geared towards students with disabilities


Creating a budget in college.

You can set up or create a budget if you’re a student. Manage your money to make sure that you have enough for all of the things that you need.

Here are some budgeting tips when you’re studying in college or university:

1. Make a list of everything that goes into your monthly expenses, including rent/mortgage, utilities and food.

2. Add up how much money you’ll need each month.

3. Look at your income from part-time jobs and decide how much of it should go towards paying off debt and how much should go towards living expenses (food, cost of books & transportation).

4. Figure out how much money is left over after paying expenses like accommodation, books and supplies, transport, groceries and food.

5. Figure out how much you need to pay for tuition and fees.


Having roommates in college.

Living with roommates can help you save money and get more out of your apartment or house than living alone.

Roommates will also allow you to split costs like utilities, groceries, and rent. This can significantly help make ends meet as a college student.

Using credit cards responsibly.

First off: use credit cards responsibly. Credit cards can be helpful when you’re trying not to carry cash around with you everywhere because they let you track how much money has been spent.

Many students turn to credit cards when they need cash, but it’s essential to use them wisely so you don’t have debt later on. Try not to make more than one monthly purchase on a credit card unless necessary. Try to pay off the credit card balance monthly before interest starts accruing.

Get an internship or part-time job.

The best way to pay for school is to get an internship or part-time job.

Try to find a job that gives flexibility to your schedule. So that you don’t feel like it’s taking away from your studies or social life too much.

If you have the opportunity to work during the summer months. The summer months are when classes are not in session so that it doesn’t interfere with class time or exams as much as possible. Consider taking advantage of this opportunity, even if the job is only for a few hours a week.

Many companies hire students who are looking for work during breaks.


Having enough money for college makes life so much easier! You can focus on school work, be more social, enjoy your time at college and be more productive.

On the whole, studies must still be a priority. It is okay to borrow money if needed, but remember that borrowing is only one possible solution. Be sure to look into all available avenues of financial aid and decide with your parents and counsellor which option seems right for you. This can be complex, so be careful to take your time with these decisions.

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