Avoiding student debt problems
By Gordon Powers, Sympatico / MSN Finance
New college students have a lot to learn about life on their own. Unfortunately, the majority of university newbies have had minimal experience dealing with money, which is why it's often a major source of stress for them. It’s hard to suddenly live on a set budget if you have never done so before.
As a result, many kids have problems managing their cash wisely and can end up spending much more money than they have and then borrowing unnecessarily – often without parents’ knowledge.
Teach your student how to maintain a budget. If they’re getting a chequing account for the first time, show them how to balance their chequebook and record their transactions to avoid bouncing cheques. While you might still do this by hand they’ll likely be more comfortable using Quicken or colourful cash management sites like Mint.
Being away from home for the first time, students often don’t realize how small purchases can add up. Because of this, too many end up strapped, particularly when it comes to credit cards which have become so easy to get that you can sign up for one between classes, thanks to schools allowing credit card companies to peddle their services on campus.
Used wisely, credit cards can be beneficial, especially in emergencies like unexpected car repairs. But, not having had one before, many students don’t realize the added costs – i.e. 18 to 19 per cent interest charges – if the bills aren’t paid immediately. Nor the up-front fees they may face.
Here’s a cautionary tale from a McMaster student who, after several years of school, seems to have finally figured things out. And another from a Simon Fraser student who wonders if universities are doing enough to protect their charges.
Posted by: tomwpeterson | Aug 21, 2021 10:30:36 PM
All great comments but....blame the student, blame the parents, blame the system, blame the brain...it's too late for a lot of young adults like Dave above....my question from the beginning: How do we help those that are already in trouble...for whatever reason and the hell with who's fault it was? They need help now! What can they or we or the government do anything today?
Posted by: Charles Falter | Aug 22, 2021 4:07:43 PM
The worst part of my college experience was going to one in the wrong neighborhood. I didn't even feel safe walking around and all the college cared about was getting their money. http://www.chimpout.com/forum should be required reading before any young kid goes off to college. It can save you a lot of headaches.
Posted by: bill | Aug 22, 2021 4:41:18 PM
As a father who of three kids that went to university, I was lucky enough to help them pursue their job and ambitions. This is cost me an enormous amount of cash flow. Now that I look back I wish I would've spent more time with my kids and challenge them earlier on to pursue a career that they would have exceeded in. Yes a lot of money was spent foolishly. Starting off in University with no career goals or expectation was both frustrating for myself and the kids. But going to university was the thing to do, choosing a career secondary. We need to challenge your kids early on in life, and tell him that it's not a free ride. It comes with responsibility and sacrifice. During the 30s and 40s 16-year-olds were flying jet planes, and taking apart aircraft motors, and doing things that aren't done l tell there at least 30 years old. If i could do it again, I would let them get their own loan, make their own budget so that the responsibility lies in their hands. I would also allow the students to take a $5000 tax credit every year on their income tell they have their loan paid off.
Posted by: bigted | Aug 22, 2021 6:10:00 PM
I chose to live at home and attend a far less prestigious university. I took 10 years to get my BA Hons. and MA and worked as many as 3 jobs at a time to graduate without any student loans. I watched my fellow students spend their way into oblivion with student loans not at all making the connection that these were loans and by nature required paying back. This was my choice I could have moved out of my home province applied for student loans but I decided I did not want to incur additional debt at such a young age. Why should I pay for someone else choices? I went without and look far longer than my peers to graduate; I lived at home, used public transit and wore second hand clothes not the latest fashions. I paid for my choices and so should everyone else.
Posted by: Monkey | Aug 22, 2021 11:36:18 PM
I had 3 jobs all throughout school to avoid graduating with student debt. Had to listen to my stupid classmates complain that they were in debt while they did nothing about it. I have no pity for people who come out owing money. They obviously didn't care enough to step up and make the problem go away.
Posted by: lifedestroyedbydebt | Aug 24, 2021 3:11:01 AM
@A+ you are a self righteous bastard. If you are so smart, have you ever helped anybody else out of their financial hole? You are a total jerk off. You think you are so clever. Go stump for a right wing cause.
@larry: the idea that there is a bond on your birth certificate that can be used to pay off your debt is a total load of crap, its a big hoax and its around in the US as well. You are an idiot.
Why dont more of you see the students broken by debt as the victims? And why is there no admonishment of the LENDERS who lent out the money in the first place? They bear the greatest share of responsibility in the matter of student debt.
Next to look at are the educational institutions that operate on the backs of all this student debt. Once you are done with your program, watch that first step on your way out, its a doozer. They dont do a damn thing to help students reduce and eliminate their debt. Nothing not a god damn thing.
The whole system is a horrible farce against which anyone who really needs the education doesnt stand a chance.
Posted by: lifedestroyedbydebt | Aug 24, 2021 3:14:05 AM
enough of the superheros with 3 jobs. Not everybody has those options. Your life has to be damn perfectly arranged in order to do that.
You all have to stop punishing the victims and start looking at the practices of the lenders that made all of this possible.
Posted by: Steve | Aug 24, 2021 7:45:10 AM
Best way to avoid student debt problems is to go to university with the rest of the Baby Boomers back when it was mostly paid for through taxes. Seeing as that isn't possible the next best option is to be born to a wealthy family who can write your education off on their taxes (again paid for by tax payers). For everyone else just remember that you don't have a chance to replicate your parents life. Firstly there is no mass of waiting good jobs upon graduation, Universities have become cash cows for bloated educational leeches. When you graduate you will be exploited by the banks who own your student loans. You will then buy a house inflated in price to pay for baby boomers retirements. If you get sick you will have to pay for medication which costs more than it should because it needs to subsidise the free medication for the bloated retiree's. If you think for a minute that you're going to have children you had better budget well for child care because your parents generation has no time to provide the daycare that they received from their parents. If it is any consolation you can laugh at the previous generation because although they have abdicated their responsibility to you and the future. To get a picture of what that will look like for them look to Japan where the elderly are discovering that although they are living much longer their failure to provide for the young has deprived them of people to care for them. Best solution? Get a CDN/US education & move to China where our jobs have been sent Stiff the society that wants to screw your future
Posted by: CINDI | Aug 24, 2021 9:27:34 AM
I have 2 sons. 23 yr old finished college and gainfully employed, no debt and a very good money manager. 19 yr old in second yr university, no debt and sucks at money management. When they were born we set up RESP's. Could we really afford that extra money back then?....certainly not. Back then we couldn't save hardly anything. However we knew if we made a contract we would be sure to make the payments no matter what. We also believed that the best gift we could give our children was a good post secondary education. So for 21 years we invested in our childrens future. No regrets. Anything that the RESP's don't cover is on their nickel. And bye the way...many countries that offer "free" education require military service in exchange. i like my way better. And no, we do not work for investment or scholarship companies.
Posted by: bigted | Aug 24, 2021 9:47:58 AM
@lifedestroyedbydebt I wasn't a superhero - just practical - if I wanted an education debt free I lived cheaply and worked hard. Those were the choices I made to be student loan free. Were the jobs fun? No not unless you liked flipping burgers and other menial work - but it worked for me.
Posted by: Miranda | Aug 25, 2021 12:20:35 AM
Any student looking to save money on computers and accessories should check out www.bestbuy.ca/bts......they have new deals every week until Sept 14, and while your there don't forget to enter the contest to win a trip for you and three friends at www.bestbuy.ca/wb
Posted by: Lindsay | Aug 27, 2021 1:26:29 PM
I don't normally comment but this is a topic that hits close to home for me. I'm lucky in the sense that 4 years after graduation for my BA I'm 1/2 way through paying off my loans. They were originally $40,000. This is possible because every tax refund and every bonus has gone towards paying it down. No vacations or luxurious lifestyle here.
Staying at home wasn't an option as I'm from a rural community. My parents didn't have any money saved to help me with finances. I worked every summer to help offset the expenses, often part-time during the school year when my schedule allowed. I am starting my MA this year so I'm not stuck paying my loans for the BA and tuition for the MA because being part time only exempts you from the principle payment which would extend the life of the loan. Now I want to pay off this loan, but like others I object to the high interest rates I am being charged because I chose to get an education.
It makes me bitter because although I loved the experience of being in university it will cost me 13-14 years of scrimping and saving (5 for the degree and 8-9 to pay it off). That is a large sacrifice to make so now I tell people to only go if you really love it because the price is too high otherwise.
Because of this loan I do not own a car, I have almost no savings, I cannot save enough for a down payment for a house so I rent. I can't afford children so I don't' have any. My life is on hold until it's paid off because I can't afford anything else with my monthly expenses and the loan.
And to boot my credit rating does suffer because I have such a large debt load with out having any assets even though I have never missed a payment, if fact I try to pay a bit extra i I can afford it.
So this leaves me annoyed, our loan system is broke.
Posted by: jimmy | Oct 20, 2021 7:15:16 PM
There is a new way to avoid student debt; MYPLASH.COM visa debit card. MYPLASH is the only reloadable prepaid card featuring the hottest music artists, athletes and brands.
>Cardholders get special discounts on merch, music and more, along with access to exclusive content. Check out the MYPLASH MALL and MYPLASH MUSIC MALL at http://www.myplash.com/mall.php.
>Teens can sign up with a parent and there’s no credit check or bank account required.
>For more info, wallpaper downloads and other cool stuff check out www.myplash.com.
Posted by: medical schools sacramnto | Dec 5, 2021 4:55:16 AM
the blog is really informative and i like the blog most because it discuss the student loans, the student must be provided such facilities from the government. there is a blog that facilitate the students with the loan at low interest rate. the url is http://www.sacramentomedicalschools.com/
Posted by: medical schools sacramnto | Dec 7, 2021 5:14:54 AM
the blog is really informative and the content is really strong in term of the knowledge. any way the students are the assets of the country.so we should facilitate the students in their studies.