If college students could have one dream, it may be to get a solid education without having to put off paying off their enormous student loans and credit card debt for the next twenty years.
Please grant my request, genie. Poof. What credit card debt do college students have?
Dear would-be Aladdins, if it were that simple! The fact is that you can get a top-notch college education while carrying less credit card debt. It requires some knowledge of money management as well as self-control, a concept that is becoming less and less American. You can check The Best Colleges in Colorado Springs Area here.
For students today, there are more financial concerns than for any previous age, according to Todd Romer, executive director of Young Money Magazine.
By the time you’re twenty-two years old, you can find yourself graduating into college student credit card debt purgatory due to escalating tuition costs, amenities like cell phones and high-end dining places that are springing up all over college campuses, and more. And all you really desired was a college education without debt!
Try the following advice if you want to reduce your financial anxiety and take action against college student credit card debt:
Don’t overuse credit cards
Nearly a quarter of college students have debts of more than $3,000, with the average credit card balance of $2,700. 10% of the population owe more than $7,000! Even without factoring college loans, that.
Romer asserts that getting a credit card is not a bad thing. 78 percent of all college students today hold at least one credit card, according to a recent study of applicants for student loans performed by Nellie Mae, a prominent provider of higher education loans. Romer recommends college students to keep their credit card in the back of their wallet to use for emergencies and/or significant expenditures they know they can afford to pay back within a month.
tend to use credit cards for gift cards, for example? Romer advises college students to call their credit card provider and request a $500 credit limit. Additionally, request that they hold off on changing the limit until you tell them that you wish to raise your credit limit. Have a third party limit your spending “until you become more responsible, and that just evolves over time,” Romer continues.
However, given that certain colleges and institutions get into multi-million dollar relationships with credit issuers and give them the go-ahead to recruit students right on campus, how can you earn a college education without accruing student loan debt? Remember that you are not required to take part in the promotion on campus if a Bank One credit card table appears at your school’s student union once a week, advises Romer. “Treat it like any other temptation you would encounter in this life. Be judicious in your choice of activities.”
Begin a weekly spending plan with a budget
Yes, a weekly spending plan is a clever euphemism for a budget, but let’s face it—you college students need to hear it sound a little more tempting. Knowing your true income is the first step in managing your finances, according to Romer. “Consider it a weekly spending plan to help you pay for a higher education and lessen the stress of student loan debt,” the author advises.
Romer continues by saying that even while more college students than ever are working either part- or full-time, many still discover that they are spending more than they are making. You should be fine if you check your weekly spending plan twice a week, he continues.
Manage your student loan debt responsibly
Consider your student loan as the best loan you could possibly have, advises Romer, and try not to worry too much about having to pay it back because you are putting money into your college education. In spite of this, you can graduate with credit card debt from college and student loans equal to our parents’ mortgages. For starters, don’t be persuaded by the marketing hoopla that says everyone is enrolling in a name-brand university and accruing student loan debt, so you may as well, too.
Universities attend schools with annual tuition and fees of less than $9,000, and 56% of students pay tuition and fees of between $3,000 and $6,000 per year. Additionally, the College Board reported that only approximately 5% of all students attend colleges with tuition and fees totalling $33,000 or more year, despite the fact that private four-year institutions have a significantly larger range of tuition and fee costs.
If receiving a degree from a prestigious university has been your lifelong goal, go for it if you have your heart set on it! Romer advises that in order to avoid a credit card debt nightmare for college students, you should apply for every sort of scholarship and financial aid that is offered.
However, if you believe that attending a prestigious university is the sole method to guarantee your future success and earning potential, you are mistaken. Romer asserts that if you have a four-year degree, your interview performance will matter considerably more than whether you attended a state university or an Ivy League institution.
Consider graduate school carefully
Some recent graduates who aren’t quite prepared for the workforce choose to enroll in graduate school right away. While there are good reasons to enroll in graduate school straight away after completing your undergraduate degree, if you’re doing it for the wrong reasons, it can cost you a lot of money and will prevent you from acquiring valuable work experience.
Gaining work experience is crucial, and you always have the option of returning to graduate school, according to Romer. “Frequently, the business where you work has the funding to cover half or even all of your graduate school costs.”
It might not be a bad idea to enroll in graduate school right away if you have a clear plan for it and where it will lead you. Romer suggests getting some work experience first if you’re only moving because you’re unsure of what you want to do with your life. Investigate employment options while beginning to pay off some of your credit card debt from college. It will be financially detrimental for you to go to graduate school without a clear plan since you cannot be certain that you will receive a salary that will enable you to pay back your loans promptly.
The average graduate student borrows $37,000 in student loans, or $42,000 if you include undergraduate debt, according to FinAid.org, a financial assistance resource.
Always make investments
According to Romer, creating a weekly budget while in college and learning how to invest boost students’ confidence in their capacity to manage their finances when they graduate.
You could object, “But I’m a broke college student with credit card debt.” I have no money to invest, Romer advises starting off with just $25 to $50 per month. “Dedicate yourself to knowing how to invest because time and compound interest are powerful forces,” he advises. Romer continues by stating that another advantage of investing while still in college is how it alters your spending patterns in other parts of your life.