As the cost of higher education continues to climb, student loan debt remains one of the most significant financial hurdles for Gen Z. In fact, over 43 million Americans currently have student debt, with over 7 million of those borrowers in default. At ScholarshipOwl, we wanted to better understand student debt expectations vs. reality, and how students are planning for their financial futures amidst this debt crisis.
Our latest survey, the “Road to Student Loan Repayment,” gathered insights from over 30,000 students. The results paint a picture of a generation that is acutely aware of the financial burden ahead but is also becoming increasingly strategic about how to manage it.
Who Participated in the Survey?
In April 2026, ScholarshipOwl surveyed 32,242 high school and college students on the ScholarshipOwl scholarship platform to find out more about how Gen Z students are paying for college.
Among the respondents, 61% were female, 37% were male, and 1% identified themselves as a different gender identity or preferred not to respond to the question. Nearly half (48%) were Caucasian, 21% were Black, 17% were Hispanic/Latino, 7% were Asian/Pacific Islander, 1% were American Indian/Native American and 6% selected “other” or preferred not to respond to the question.
More than half (55%) of the respondents were high school students, with the overwhelming majority high school seniors; nearly one-third (31%) were college undergraduate students, primarily college freshmen and college sophomores; 9% were graduate students and 5% identified themselves as adult/non-traditional students.
What We Learned
The Heavy Burden of Borrowing
The reality of student loans is stark: a significant portion of students expect to graduate with substantial debt. Our survey found that 42% of students estimate they will borrow more than $50,000 to complete their college education. Even more concerning, 17% expect their total borrowing to exceed $100,000.
Only about 8% of respondents stated they won’t be borrowing any money for college, highlighting how rare a “debt-free” degree has become in today’s economy.
Repayment of Student Debt: Expectations vs. Reality
The survey data reveals a significant gap between how quickly students expect to pay off their loans and the reality of the typical repayment journey. Nearly two-thirds (62%) of the survey respondents expect to repay their student loans in 15 years or less, with over 37% believing they can achieve that within 10 years; however, the reality is that it takes the average borrower 20 years to pay off their student debt. Only one-fifth (20%) of respondents expect that it will take that long to repay their loans. And a substantial portion of respondents (12%) expect to be debt-free in less than 5 years, an ambitious goal that often conflicts with entry-level salaries and the impact of compounding interest.
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The contrast is even more stark when viewed in the light of the One Big Beautiful Bill Act (OBBBA), which will be fully implemented on July 01, 2026. While existing repayment plans often enable students to access loan forgiveness after 20 years of payments, the Act’s new loan repayment plans extend that to requiring 25–30 years for loan forgiveness.
The bottom line? Many of today’s loan borrowers will still be paying for their degrees well into their 40s and 50s.
Proactive Repayment Strategies
Despite the daunting numbers, students are not just waiting for a miracle. They are actively planning how to tackle their debt more quickly and easily. The top strategies identified by our respondents include:
- Budgeting is King: 63% of students plan to “create and stick to a budget” to manage their finances.
- Employer Assistance: 52% are looking for jobs with employers that offer tuition reimbursement or student loan payment assistance—a clear signal to companies that these benefits are a top priority for Gen Z talent.
- Aggressive Payments: 49% intend to pay more than the minimum payment whenever possible to reduce interest and shorten their repayment term.
- Living with Family: 33% plan to live with their family for a few years after college to save on living expenses and put that money toward their debt.
While 11% are holding out hope for more expansive government student loan forgiveness, the vast majority are focusing on strategies they can control themselves.
The Scholarship Solution
The most effective way to manage student loan debt is to avoid it in the first place. At ScholarshipOwl, we are committed to helping students bridge the gap between the cost of college and their available funds.
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By applying for scholarships consistently throughout high school and college, you can significantly reduce the amount you need to borrow – and potentially avoid taking on any student debt at all.
The Advantages of ScholarshipOwl
To bridge the gap between borrowing needs and repayment reality, ScholarshipOwl offers a simple approach to securing debt-free funding. After registering on our platform, students are matched to scholarships and given access to tools that streamline and amplify their scholarship process.
Universal Application
When applying for scholarships on the ScholarshipOwl platform, there is no need to repeatedly complete application forms. Your profile data serves as a universal application for all scholarships on our system. This saves significant time and energy, enabling you to apply for more scholarships, and do so faster than on any other scholarship website.
AI-Powered Recommendations and Matching
The platform uses advanced algorithms to match students with scholarships they are actually eligible for, interested in, and have a better chance of winning.
Track Application Status
You can track the status of all submitted applications, giving you insight that you won’t have anywhere else. What’s more, you won’t have to create and manage a spreadsheet of your applications, since ScholarshipOwl handles the tracking for you.
Vetted and Secure Database
Through our Credibility Score system, you’ll be able to access vetted scholarships that are safe to apply for, and prioritize scholarships that are truly worth your time and effort.
Opt-In for Automated Applications
Only ScholarshipOwl enables you to automate some of your applications – simply opt-in, and we will automatically apply you for all of the “no requirement” scholarships in your match list! You can also opt-in for automatic re-applications for all of the recurring scholarships in your match list.
The time you save will enable you to focus on the scholarships that take a bit more time, while we are partnering with you to get all of the easy-apply scholarships out of the way for you!
AI Essay Assistant
Students often dread essay scholarships – but with our AI Essay Assistant, you’ll find that it is fast and easy to apply for essay scholarships. Simply respond to a few questions in a chat-style process, and our system will generate an initial draft of your essay. All you’ll need to do is review and edit further, and you’ll be able to quickly apply for the scholarship!
By leveraging the ScholarshipOwl platform, you’ll be well on your way to reducing your reliance on student debt to pay for your education! Not yet a member of ScholarshipOwl? Start your free 7-day trial today!
Key Takeaways
Substantial Student Debt Has Been Normalized
With the overwhelming majority (92%) of respondents expecting to graduate with student debt, it is clear that today’s students have accepted that debt will be part of their education. This is even more clear with the largest segment of respondents (17%) expecting to borrow more than $100,000 for their education. As existing borrowers already know, today’s students will be facing debt that will likely impact their financial future for decades to come.
Proactive Financial Literacy
The good news is that students are becoming more savvy about strategies and tools that can minimize the impact of their debt. Most respondents identified multiple strategies they plan to employ in servicing their debt. Frequently cited strategies included budgeting (63%), working for an employer offering education benefits (52%), and living with family for a period of time to save on living expenses (33%). Many respondents also plan to consolidate their loans (21%) to have just one payment each month, and nearly half (49%) hope to make larger monthly payments to repay their debt faster. Taken together, these results suggest that students are becoming more savvy about both repayment strategies and financial tools available to them. Still, their student debt expectations vs. reality they will encounter after they graduate will likely be a burden they are not prepared for.
The Importance of Career Choice
Many students are explicitly looking for career paths and employers that provide debt relief, highlighting a shift in how graduates evaluate job offers.
While there are many strategies to manage and repay student loans, the most effective way to ensure financial freedom after graduation is to minimize borrowing from the start. Students are strongly encouraged to prioritize debt-free sources of funding—such as scholarships, grants, and part-time work—to avoid the long-term burden of student debt and build a more secure financial future. Because the best way to manage student debt expectations vs. reality is to avoid taking on debt to begin with.
Final Thoughts
Gen Z is entering the workforce with their eyes wide open. They understand the weight of student debt, but they are also equipped with a plan. Whether it’s through strategic career choices, disciplined budgeting, or leveraging employer benefits, students are taking the “road to repayment” seriously.
Are you ready to reduce your future debt? Start your scholarship search today on ScholarshipOwl and take control of your financial future.
Further Reading
Director of Student Advocacy
