Colleges and government agencies alike express concern at the lack of financial literacy in many students, a lack that can spell the difference between dropping out and degree completion. To address these concerns, new services, counseling options and financial education classes are appearing across the country.
Too Much, Too Fast
The problem doesn’t lie with students’ financial irresponsibility. Instead, the problem is one of experience, or more accurately, a lack of experience. A college freshman applying for student loans enters an agreement for up to five years of borrowing. This is a huge introduction into the world of financial loans.
The challenges are many. The student needs to understand the loan process, have a grasp of interest rates and their long-term implications, prepare for the inevitable moment when they need to repay the loan, and understand how to budget and make maximum use of the loan money so they won’t need to borrow even more.
All of this while taking a full credit load of post-secondary education and getting used to independence? It’s pretty overwhelming.
Colleges and Financial Literacy Courses
It may seem like it's just adding more to back-breaking course loads, dorm life and other freshman obligations, but if possible take advantage of your college or universities academic counseling department. College counselors can help you create a schedule for required courses and help guide you through scholarship and loan applications.
Additionally, counselors can help you find free financial education offered by the college or the surrounding community. Colleges often offer seminars on budgeting, balancing work and school and credit card management. Some first-year students, flush with new-found independence, dismiss such offerings, but they can help you survive your first year away from home.
Keep your eye open for college incentives which reward student planning and good grades while encouraging financial literacy. For instance, the University of Montana in Missoula offers the Four Bear program. The program rewards students who pass required courses by guaranteeing them placement in courses needed for degree completion.
This may not sound, initially, like a financial incentive, but with limited classroom space, competition for degree-required courses can be fierce. Such classes fill up quickly. If you can’t get a seat, you may need to add an extra year to your degree, with all the financial costs such decisions brings.
Part-Time Work and College?
Part-time jobs are common among college students — many collegians install 1983 mustang parts or wait tables while taking on full or part-time course studies.
Innumerable students have worked through college, but the decisions isn’t as financially cut and dried as you think. Part-time studies extend how long it takes to attain your degree. Once you compete your degree, your earning power increases.
If you can work part-time while engaged in full-time studies, you can offset some costs. Lengthening study time for low-paying jobs, however, doesn’t make as much sense, particularly if you have to take out more loans to cover educational expenses.