USA Today recently did a nice six-week series called “Young & In Debt“, which profiled five recent graduates struggling with high levels of debt just as they are starting out in the world on their own. They were asked to spill the beans about their financial situations and struggles, and were matched up with financial advisors who would give them advice on managing their debt. As a follow-up to the series, USA Today conducted a poll of recent college graduates, who had some advice for younger students, as outlined below.
- There were not many college graduates who said they would trade their high-priced educatin for a lower-priced one. A few, however, said they would. Some students felt a better-known private school could give them an advantage later, while others felt like their school debt held them back.
- One third of graduates said that they wished they would have paid closer attention to the terms of their loans. Read the fine print, and learn the differences between federal and private loans before you sign the dotted line.
- Many students said they were happy with their course of study, but some said that they wished they would have choosen a more lucrative career.
- Many, many graduates regretted the huge credit card bills they accumulated during college. It’s easy to get used to a lavish lifestyle that you can only afford by paying with plastic. Trying to keep up with other classmates whose families can afford their extra spending, can and does drive students to spend a lot more than neccessary.
So what can you as a student do to avoid some of the financial pitfalls that so many recent graduates are facing?
- Compare schools. Do a lot of research if you know exactly what you want to study. You might find that the best program for your field is not at a high-priced private school, but rather at a more affordable state school.
- Think about your earning potential. If you are entering a not-so-lucrative career, you may want to think twice about attending a high-priced school. It’s great to be idealistic, but reality hits hard when you’re out there on your own trying to pay back loans, rent, and all your other expenses.
- Apply for financial aid, and study loan options. If you fully understand the terms of the loans you’ll be taking going in, you’ll be more prepared to deal with them when you graduate. Understand your responsibilities to pay them back, and the negative things that can happen if you don’t.
- Avoid credit cards. Try to cover your daily expenses without putting expensive lattes, beers, and trendy clothes on your credit card bill. Instead, you may have to get a part-time job while in school, and maybe a full-time job during summers.