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`It builds you up and grants opportunity for progress. It opens the door to a world of possibilities never before within reach. It moves you forward to places you never dreamed you would go. Let it continue, and it can tear you down and ruin your future. This is what college loans have to offer.
For years, students have expected college to be an institution that sucks the money right out of your pocket before you even have a chance to dream of what it can buy. Even so, it has not stopped students from applying for loans and waiting for that fateful day, six months after graduation when the government stops paying the interest.
A study done by USA Today shows students’ loans to have risen from $12,391 in 2001 to $14,379 in 2006, an increase of 16 percent. Nearly two-thirds of those who graduate from college will have student loans, with nearly half of those students failing to make payments and forcing lenders to sell the loan to collection agencies.
Those who graduate from college will have a harder time getting a mortgage, getting a loan for a car or even paying back the debt that hangs over their heads. This is when getting ahead can really hold you back.
The benefits of trying to keep debt to a minimum, even paying it off while in college, have had a positive impact on students when they graduate. Students who have a credit card but pay it off monthly have been able to build credit without the constraints of debt. Also, those with a subsidized loan can begin paying off their debt for six months before they are responsible for the interest.
Not all students are irresponsible when it comes to their finances. Millersville University sophomore Stephanie Martin commutes from home to school to cut back on costs, but by working in the school library she still feels connected to the campus.
“I know that if I wasn’t working I would just hang out with people,” Martin said. “It’s more important that I can do what I want with my life after school.”
Many students who graduate do not begin working to pay off their debt but live the lives that filled their dreams. They purchase new cars and big screen TVs, and they travel the world. They buy new clothes to make a good impression, live in upscale apartments and enjoy several nights out on the town. Some post-grad students dig themselves into a hole because they are undisciplined and selfish.
The financial crisis of college graduates can be blamed on their lack of concern for the future and their focus on impressing their peers, family members and potential employers.
If you do not have money, do not spend it.
Too often people in their 20s spend $100 at the bar, charge clothes to their credit cards and not pay the debt off or think that skipping a utility payment will not hurt them in the long run. Wrong. Companies keep record of payments, and missing one can jeopardize your chances of finding a good job to pay off your debt.
A study by the College at Brockport showed that 57 percent of college students work part-time, a number that has grown since the 1980s. Working a minimum of 10 hours a week has shown to have a positive impact on students’ levels of productivity and their work ethics. If students are working more, why is the amount of debt increasing? The answer is a lack of self control.
Students fail to create a budget. They do not think about how much they should spend each week and how it could hurt them if they exceed that amount. They want it and they want it now. If you do not look to the future, you are going to spend it making money that is not yours but your collector’s.
Graduating from college means having the opportunity to show the world what you have learned during your years in higher education. Do not waste all those years in the classroom to have debt hold you back. Controlled spending and a high work ethic will keep more money in your pocket and less in the hands of collectors.
As the economy continues to shift and jobs are cut across the market, graduates need as much advantage as they can get when entering the real world. Moving ahead in life needs to be done without baggage. Work. Save. Think ahead. It is a hard reality but one that will be even harder without self-control.