An Unconventional Guide to Paying for College

What are the Pros and Cons of Student Credit Cards?

Posted by on Jan 13, 2016 in Getting Started | 0 comments

When children start university, their parents might have bought them a bar fridge, a laptop, and probably some new clothes as well. Many of these freshmen come to university armed with their very first credit card too, and although there are several risks involved with giving a young adult the responsibility of handling their own credit card, there are some advantages too. So, what are the pros and cons of student credit cards?

There are numerous benefits to taking out a credit card as a student, such as:

  • Convenience in case of emergencies
  • It’s a safer way to pay for things instead of carrying around cash
  • More secure online shopping
  • Helps to develop money-management skills
  • Helps to start building a good credit history for later in life, when loans will be needed for things like cars and homes

One plus for parents, is that if they’ve co-signed on the card, they should get a statement at the end of every month too, so they will be able to monitor their child’s spending habits during the month. This will allow them an opportunity to see if their money is being spent irresponsibly, and to help offer guidance through their children’s first few years of financial independence.

The Downsides

Of course, with all forms of lending there is a downside as well. One of the biggest downsides of students having their own card is that the majority of young people graduate with a large student loan debt. This already heavy burden is increased significantly when there is also money owing on a credit card.

These sizable debts can also prevent the student from learning to save while they’re still at school, which can have an impact on their financial situation for years to come. Bills that aren’t paid on time can cause a lot of damage to a student’s credit score, and the same applies too, to parents who have co-signed for the card.

Some credit cards have high annual fees and interest rates, so it’s important to compare online credit cards to make sure you get a good deal. Taking the time to find a good offer could save you a significant amount of money down the line.

How Parents Can Help

Parents give their children credit cards when they start university, mainly for the convenience that the card provides. However, students need to be taught how to use their cards responsibly, to avoid overspending and building up unwanted debt. There are several things parents can do to help their children improve their money management skills.

Set down the rules and regulations and stick to them. By letting them know what the card should be used for you can establish the ground rules. If the rules are broken, the card can easily be taken away.

Limit the card’s usage to only school expenses such as books and so forth, rather than entertainment, and let your child know too, that you expect them to use it to pay monthly bills regularly.

Talk to your child about using the card wisely to avoid high interest rates by paying off the balance in full each month. Make them aware of identity theft and the things to be aware of when using the card online and in stores.

Students must understand how important it is to only use the card to charge for amounts that they can afford to pay, and that the key to responsible credit management is to keep their charges to at least 30% lower than their credit limit.

Students must learn that using their credit card wisely while they’re still in school will help build strong credit record. This will open many doors for them in the future, such as when they need to borrow money to buy their first house or car, making their financial future much more straightforward.

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The Costs of a College Education

Posted by on Oct 19, 2015 in Getting Started | 0 comments

College education is not cheap; the cost seems to increase each year and the level of debt as recorded by student loan statistics confirm this. The $1 trillion involved is truly staggering. That of course excludes details of the money lent to students by their parents and other revenue raised to allow students to complete their education as a prelude to career. The chances of a successful career are perceived to increase for graduates but they mostly face repaying their debts as their pay checks begin to come in.

It is essential that a student and his or her parents do some research to obtain the money required unless it has already been safely saved anticipating the future needs. That can be difficult and the recession certainly destroyed many family’s savings.

Alternative Loans Specific to Education

The Federal Stafford Loan is competitive. Those who qualify get subsidized; the interest is paid by the Government for the time the student is still at college. Unsubsidized loans are available to all and interest deferred. The loan rate is capped at 8.25% but is variable. The amount that can be borrowed varies from student to student but is never more than $31,000 in total. Parent PLUS Loans and Perkins Loans are two other avenues of finance while private loans generally require a co-signatory. The latter are particularly aimed at needy students and their numbers have also increased since the recession struck a few years ago.

Other Revenue Sources

Parents can re-mortgage their homes as another alternative though the problems that the real estate market experienced during the recession has meant that the level of equity that many families owned was reduced and is just recovering. There is sometimes a cash element to an insurance policy or the chance of withdrawing a sum from the 401K Retirement Fund though the latter has an impact on retirement provisions and that can be a dangerous move.

That should be a last resort. Everyone needs to make proper provision for retirement and keep making contributions. That is a discipline that should lead to a comfortable retirement and that is less likely to happen if people draw money back out for other use.

Pay Off Expensive Debt

If you have a child in his or her mid-teens who is almost certain to continue on to college before starting to work then you should be making the suitable preparations to ensure their time can be funded. If recent years have been difficult because of the recession then it may be a challenge. What is certain is that if you are to help in any significant way then you need to look at your financial position and make some appropriate decisions. Certainly you need to get rid of any expensive debt you may currently funding. A common example is a credit card balance that incurs a high rate of interest each month. You can pay such amounts off with a personal loan at a much lower rate of interest if you have a regular income and appear capable of making the repayment instalments throughout the agreed term of the loan.

A Good Budget

It highlights the absolute need for everyone to have a budget and the discipline to follow it. It must show you are ‘balancing the books’ to start with mindful that if there are imminent education costs to add there may be the necessity to make economies elsewhere. The personal loan is one part of that. Certainly other household expenditure may be reduced by seeking more competitive utility suppliers, insurance premiums and telephone network costs.

The budding student can perhaps contribute as well? There are part-time jobs available now that the economy is improving. Those parents who have instilled the value of money into their children at an early age may well find that as teenagers they are more than willing to do a little work and they may have saved money themselves in addition.

There is certainly great merit in continuing education and with a little financial prudence it should be affordable. The benefits should come in the future with the prospects of a higher paid job as a result of graduating before going into the jobs market.

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Book Review: Share or Die – Voices of the Get Lost Generation

Posted by on May 22, 2013 in Getting Started, How to Pay College Tuition | 0 comments

I was recently given a copy of the anthology – Share or Die – Voice of the Get Lost Generation in the Age of Crisis. The book is a collection of stories, mostly written by young adults, about what it is like to grow up in Generation Y (Born after 1985) and try to find employment post-graduation.

I don’t normally review books here at Money for College Project, but this book is an exceptionally interesting read. Many of our readers are in Generation Y, or are just outside of it and can find very relevant lessons in this book. If you are interested, you can pick up up here: Share or Die: Voice of the Get Lost Generation in the Age of Crisis

Never a Better Time to Become and Entrepreneur

I have said this many times before: During college, or the period right after graduation, is the best time to start a business. Your expenses and responsibilities are as low as they will likely ever ben in your life, and a business started in your early twenties can set the tone for the rest of your life/career.

Gen Y is graduating into a very unique economic climate. The world is trying to upright itself after a global economic recession and traditional jobs markets are still faltering. The barriers of entry to starting a business and becoming an entrepreneur are lower than they have ever been.

The Internet has brought the world together, and therefore you are able to connect with like minded people from around the world to share ideas, brainstorm, and plan. You can reach targeted customers quickly and efficiently through online advertising and social media. You can sell digital products online or become an affiliate for someone else’s products. Start-up companies are even partnering with large corporations to head their research and development wings. Did you catch that? Large corporations are outsourcing the future of their business to the sharp minds of Gen Y!

It is our time!

Pack Up and Travel the World

Another main point in many of the stories shared in this book is the call to to pack-up your things and travel while you can. There is a lot than can be learned from travel, and from personal experience, I can attest that many important life lessons and perspectives can be gained by getting outside of your comfort zone. In particular, I learned a great deal about how the U.S. is viewed in other parts of the world.

I think it is very important to understand that there is value, beauty, and power in the world outside the shores of the U.S. It is very easy to get an superior imperialist attitude living here, and this perspective will aid you in your career moving forward. it may also open up opportunities to connect with new and exciting people and places. It might even turn into a job if you meet the right people along the way!

The Bottom Line

graduating from college and striking out on your own in 2013 is not easy, but there is hope. In fact, the future is brighter than it has been for some time and now is as good a time as any to start your future.

Start a business, travel the world, pursue your goals, just please….don’t sit around and feel sorry for yourself.

Get up and make it happen!

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Lifestyle Inflation and Greedy College Students are Driving College Tuition Higher

Posted by on Apr 27, 2013 in Getting Started | 2 comments

lifestyle inflation

The news is filled with stories and data of rising tuition on college campuses. I have written about this very fact a number of times here on the blog. The talking heads on every major news channel mention it at least once per day and each person you listen to may spout out a number of various reasons why college tuition is continually on the rise.

“Experts” are so divided on this issue because there is not a clear cut answer. There literally could be a million internal factors that influence the cost of a colleges’ tuition, as well as the external factors of our national and global economy.

In researching this phenomena  and from working on a college campus, I have a hypothesis of why college tuition has risen so dramatically in the past decade: Lifestyle Inflation and Greedy College Students!

Lifestyle Inflation

I believe that “lifestyle inflation” or the 21st century version of “keeping up with the Joneses” is to blame for driving college tuition prices to unprecedented heights. College students are simply no longer satisfied with musty dorm rooms, and uncomfortable classroom chairs. College students expect to have multiple Starbucks locations on their campus. They want manicured grass and climate controlled buildings. They want spotless restrooms, and state of the art laboratory facilities.

Today’s college students expect to have sports stadiums which rival (or far surpass) professional teams. They want to have a gym facility with an indoor climbing wall, olympic size swimming pool, Zumba classes, and enough ellipticals to entertain an entire sorority.

College students also expect to have a car on campus, they expect to have access to social activities at every hour of the day, they expect their professors to bend over backwards to accomodate them within their office hours, and they expect to have private showers.

None of these conveniences and amenities are cheap.

To attract new students, colleges are forced to cater to these demands. The sad thing is that you will likely never get a student to admit that they crave the above luxuries. Even though they may not voice this opinion, their voice is heard loud and clear through their actions. They choose to go to colleges and universities which offer these amenities. The better the amenities, the higher the enrollment.

A Vicious Cycle

Many colleges are driven by their enrollment. Their budget is directly determined by the number of students they admit each year, and they do not receive funding from the state or other external entities. Colleges who live and die by the number paying students they have on campus each semester must do whatever is takes to attract their quota of students. Attracting new students means building bigger and nicer facilities, and providng all of the amenities mentioned above.

When college students (and parents!) walk onto campus for their college tour, they expect to find these things. Unfortunately, many students base their college decision on the level of the amenities offered by the college and not on their academic prowess.

Here is the vicious cycle: Colleges must provide these high priced amenities to attract new students, these amenities and facilities cost a great deal of money, thus driving up tuition costs, parents and students complain about high tuition costs and demand that colleges find ways to lower their costs.

The standard of living on a college campus has expanded to a level that colleges simply cannot keep pace with. Their attempts to keep pace have resulted in the skyrocketing of tuition rates.

As college tuition prices are driven higher by the insatiable desire of students for high priced amenities, student loan debt also continues to skyrocket. This is the predicament that we find ourselves in today.

Let’s take a step towards halting the rise of both college tuition and student loan debt, by eating more ramien noodles and accepting a moldy dorm room as your right of passage!

 

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Bubba’s Hover Craft with Oakley for Golf Courses – April Fools Prank?

Posted by on Apr 2, 2013 in Getting Started | 0 comments

So this post is just for fun.

But for those of you who have not yet seen the video of pro golfer Bubba Watson driving his Oakley hover craft around a golf course, you need to see it!

bubba hover

If this is real, sign me up!

I don’t even play golf, but this would make me pay money to go to a golf course.

Being a designated driver has never been more fun!

If this is an April Fool’s prank; hat’s off to Bubba and Oakley. This is one of the more elaborate pranks I have see in awhile.

But also, kudos to them for thinking of an incredible ingenious idea that may actually work. If this is a prank  I can guarantee that someone will run away with it, and make it into a profitable business idea. Not a bad way to profit off of an April Fool’s prank (although, here is to hoping we will see it out on the back 9 next time we play!)

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Florida Gulf Coast’s Server Crashed — Lesson in Website Traffic

Posted by on Mar 30, 2013 in Getting Started | 0 comments

florida gulf coast university

Admit it. You had never heard of Florida Gulf Coast University prior to their stunning upset victory in the first round of the 2013 NCAA men’s basketball tournament.

It’s ok. You were not alone. Nobody else in the world knew who they were either, which is why the servers which ran the Florida Gulf Coast Athletic Department website crashed multiple times on Sunday evening, after FGCU won it’s second game in the tournament to secure their spot in a Sweet 16 game.

The massive surge of traffic resulting from people trying to figure out who Florida Gulf Coast was, literally knocked their site offline.

Technical difficulties aside, that is incredible!

For a blogger, website mechanic, or anyone else trying to boost their traffic numbers, there are important lessons to be learned here.

From Obscurity to Priminence

Some times all it takes is one powerful event to get your name on the map. As a blogger, this might be one link from an uber popular and highly trafficked website. This might be a product endorsement from a major news outlet. This might be bad press that suddenly draws you into the spotlight. Whatever the event, be it good or bad, there are ways to harness this surge of traffic to your advantage.

Always be Prepared

You should prepare your blog or website like you are expecting a tidal wave of traffic at any minute, even if you have no idea it is coming. How can you do this?

  • Make sure your subscription and newsletter sign-up options are highly visible
  • Make sure you always have fresh content on your landing page
  • Make a landing page!
  • Keep your social media outlets up to date
  • Don’t put a “Welcome visitors from X” message on your site (It’s just tacky)

Have a Web Host With Excellent Customer Service

When your servers crash from a wave of unexpected traffic, your web host will become your best friend. The customer service number you may have never used will suddenly be on speed dial.

You also do not want to wait until your servers crash to determine whether your web host’s customer service department is up to snuff. I don’t suggest orchestrating a crash on your own site, but you should at least contact their customer service department with a routine service question to experience their response time and ease of use.

This way, when it hits the fan you will know you have an ally in your corner.

If you don’t already have a web provider, or you want one with documented excellent customer service, I highly recommend BlueHost.

Signup for BlueHost! (Affiliate Link)

I have used BlueHost for a number of years on this blog, as well as all of the other websites that I run and they have never let me down. In fact, they were able to restore one of my websites after I made a bonehead change and erased my entire site!

The Bottom Line

The bottom line is that we may never know when we can expect a massive surge of traffic. We can however, prepare to make the most of it if and when it does happen!

 

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