(Illustration by Samantha K. Dellinger.)
If you want a college education, you better be best friends with Washington, Franklin and company.
According to Anya Kamenetz, author of "Generation Debt," college tuition has grown faster than inflation for the past three decades.
With the growing cost of education, college students look to loans as the answer.
"Borrow now, pay later" appears to be the new maxim of today's youth.
Colleen Dzwonczyk, a guidance counselor at Susquehannock High School, has witnessed many students walk unknowingly into the college-debt trap.
"Students don't have a good idea of debt. They don't realize how much of a burden it is," Dzwonczyk said.
According to Kamenetz, studies in 2004 and 2005 show that two-thirds of four-year college students graduate with an average upwards of $23,485 in loan debt.
In Pennsylvania alone, the average debt for four-year institutions is $20,775, according to The Project on Student Debt.
The debt ride is fastening college students in and increasing annually.
As if the ride wasn't treacherous enough, credit card companies jump aboard. At college orientations, their offerings of free "goodies" and low introductory rates lure in future debtors.
For students drowning in loan debt, this plastic money acts as an easy savior.
Three-fourths of college students carry credit cards, says Kamenetz, and in 2005, the average unpaid balance was more than $2,000.
Although the debt ride is inescapable for many, minimizing college debt is possible.
Ruth Lawrence, a Susquehannock High School guidance counselor, works in an office full of financial aid information for students. Over the years, she has developed practical ideas towards minimizing debt.
"(Students) don't understand that they can get quickly in over their heads. They fall in love with the idea of a career but forget the practicality of it," she said. "Consider if the job you are preparing for isn't going to pay off debt in a reasonable amount of time. It is better to go for the less expensive route because you may not end up making any more money no matter if you went to Harvard or a local school."
However, the expensive schools are not as economically draining as they appear to be.
Colleges want new students, and they are willing to lower the cost of tuition for them.
In fact, more than $142 billion in college financial aid is awarded each year, according to FastWeb.com, a popular online college aid site.
Applying for financial aid is the first step. The College Board recommends FAFSA, or Free Application for Federal Student Aid. FAFSA must be completed by everyone who seeks federal government aid. The form can be found at your local library or guidance office.
Financial aid can come in the form of grants and scholarships.
Federal and state grants are need-based scholarships. A merit-based scholarship is money given to recognize achievement. You can search online, or ask guidance counselors, teachers and financial aid administrators about finding them.
Timing is key when applying for scholarships.
In an article on the FastWeb site, Daniel Barkowitz, the director of student financial aid at MIT, says you should apply no later than September of senior year.
Only after exhausting all possibilities of grants and scholarships should you resort to loans.
But what about those maxed-out credit cards?
"More students drop out of college due to unmanageable credit card debt than to academic failure," says Debby Fowles in "1,000 Best Smart Money Secrets for Students."
The best strategy to avoid credit card debt, according to Fowles, is to only have one credit card with a low interest rate and low credit limit. If you pay back on time and don't spend money on unnecessary items, your credit history will be perfect.
Upon exiting college, your financial situation will be what you make of it. Student loans and credit cards should not have to ruin your life. By realizing your financial situation and educating yourself, you will not fall victim to Generation Debt.
Leo Kornfield, an expert on national issues of financing education, puts it in layman's terms.
"The way you can improve your lifestyle is by getting a college education. And if the only way you can get that is by getting yourself into debt with student loans, then it's still a very good investment," he says on FastWeb.
Definitions:
Subsidized loans: The government pays the interest while you are in school and during grace period after school.
Unsubsidized loans: You are responsible for interest rates.
Some unusual scholarships:
The Duck Brand Duct Tape Stuck at Prom Scholarship
Vegetarians
Duck calling
People with the last name Zolp
Twins
Bowling
Golf caddying
Knitting
Source: FastWeb.com
Helpful reads:
Best fun, easy read: "1,000 Best Smart Money Secrets for Students" by Debby Fowles
Best information for young adults by a young adult: "Generation Debt: Why Now is a Terrible Time to be Young" by Anya Kamenetz
Best paying-for-college book for your parents: "Paying for College
Without Going Broke" by the Princeton Review
Best college-by-college financial aid list: "Getting Financial Aid" by
the College Board (2008 edition)
No kidding... The Klingon Language Instiute sponsors a scholarship called the Kor Memorial Scholarship. You might not know but Kor is the name of a Klingon on the original Star Trek series.
I have a daughter in College and these recommendations are terrific!!!
Thank you!
You‘ve charged everything to your card, and now, it’s time to pay up. If your credit card bills are up to your eyeballs and all you do is keep on paying the minimums, it’s definitely time to get serious.
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Bob
http://www.stop-credit-card-debt.com/