Many students accumulate debt before they realize what's happening, and it may be difficult to start digging your way out of debt once you graduate. According to the Institute for College Access & Success, debt levels for students pursuing a degree in 2016 ranged from a low of $4,600 to a high of $59,100. That debt can lead to financial problems that follow students for years--even decades--after graduation.
Look at Tuition and Fees
College tuition and fees are large expenses for students. A full-time college student might spend thousands of dollars each term for credit hours, campus parking and books. Many times, these students do not realize they could apply for federal Pell grants to cover many of these expenditures. Pell grant recipients must meet certain income requirements, but scholarships are often available for students not eligible for those grants. Find out more through your school website or counseling office or on websites such as Studentscholarships.org. Avoid parking fees by carpooling with other students when possible and purchasing books online, in an off-campus, discount bookstore or from other students to save money. And always check with your instructor before buying books to make sure you actually need them for class. Supplies such as backpacks, pencils and notebooks are usually available at a discounted rate in dollar or outlet stores. Online you can find financial problem among students essays or other info to help you in your quest.
Consider Credit Card Debt
Students are frequently targets of credit card companies and can quickly accumulate debt. Cards that carry high or variable interest rates and hidden charges can cost you a lot quickly and can leave you struggling to make even the interest payments on the cards. Because of the recently enacted Credit Card Protection Act, students under 21 must get a co-signer and credit card companies must give you the option of stopping payment on charges to avoid over-limit fees. They must also tell you before hiking interest rates. Students should read credit card terms carefully before accepting any offer, and make sure to pay their balance monthly to avoid accumulating debt. This is a typical financial problem of students entering college.
Review Housing Costs
Living expenses can eat up a lot of students' money, particularly those who are able to work only part-time or not at all. Consider living with your parents to save money if you attend a local college. If not, you definitely need roommates to help cover expenses if you live off campus. You might find that a two- to three-bedroom apartment or dorm room is much less expensive than a one-bedroom if you split the bills evenly with one or more roommates. Consider whether you need extras such as a home phone, cable or extra Internet services. Try using your cell phone as your main phone after rate comparison shopping, and if you must have Internet and cable service, find the lowest-priced deals. Turn your air conditioner, heater and lights off when leaving the home to save money on electricity. Food and other necessities can often be bought at dollar or discount stores to save money.
Examine Student Loans
Many students take on a great deal of debt in the form of student loans. All too often, students take out loans from private companies with high interest rates. According to CNBC, variable interest rate private loans average 7.81 percent, while fixed-rate private loans fall around 9.66 percent. These rates can lead to long-term debt that is often difficult to cope with for recent college graduates. Federal subsidized and unsubsidized loans have a slightly better interest rate of 4.45 percent. At the end of the loan period, repayments required will not exceed 10 percent of your discretionary income, and if the loan still exists after 20 years, the balance is forgiven.
What Is a Financial Problem?
A typical financial problem of students is they don't take the time to assess before they reach an excess in credit card debt or other debt. Many students who are out on their own for the first time may get caught up in a cycle of overspending that comes with eating out, buying new clothes or partying. This lifestyle can become expensive very quickly and can increase overall debt. To avoid unnecessary expenses, follow a budget in which you pay your necessary expenses first and leave yourself a specific amount of your income for entertainment. Then stick to that budget. Try cost-saving ideas such as watching movies at home, cooking your own meals regularly and buying clothes from discount stores.
- Sallie Mae: Student Loan Interest Rates and Fees
- Project on Student Debt: Congress Passes Major Student Aid Reform
- Institute for College Access & Success: Student Debt and the Class of 2016
- The Clear Point Blog: Credit Card Use in College After the CARD Act
- CNBC: Student Loan Interest Rates Edge Higher and Higher
- Federal Student Aid: Income-Driven Plans
- Federal Student Aid: Interest Rates and Fees
Robin McDaniel is a writer, educator and musician. She holds a master's degree in higher educational leadership from Florida Atlantic University in Boca Raton as well as a bachelor's degree in elementary education. She is pursuing a Ph.D. in adult in community education. McDaniel enjoys writing, blogging, web design, singing and playing bass guitar.