Students in Debt
November 8th, 2007By: Stephen Bishop Jr.
Today, employers are making it more difficult to get a job without having a college degree. Some do not even consider a person without one. With this said, a college degree is in demand more than ever. In order to pay for college, many take out student loans. To add to this, college is the time when many get their first credit card. Needless to say, first time credit card users mixed with student loans is not the best combination.
Student Loans:
For a little background information, there are many different student loan offers out there. A student deciding to receive a student loan must decide whether to go with a federal student loan or a personal student loan. While many different factors can determine which student loan a person chooses, the approval percentage is very high for personal student loans. Also, personal student loans have much higher loan limits than that of their federal counterparts.
The cost of tuition continues to increase much faster than the rate of inflation, and so does the number of students with student loan debt problems. Also, the average amount of student debt is increasing today more than ever! After graduation, some have almost an impossible amount of debt to repay. To say the least, debt causes stress. This is no different for those just getting out of college. Stress at a new job, or at any job for that matter, is not a good thing. Unfortunately, many have to take on second and third jobs just to repay student loans. Not to mention it is often very hard to find a good job that pays well when you are just out of college and entering the work force for the first time.
Credit Cards:
It’s important to point out that establishing good credit early in life can be very helpful later on down the road. Many students just entering college apply for their first credit card. However, many students become very careless and do not get the good start that they need. So why does this happen?
As a recent graduate, I know that credit card offers were just around the corner while in school. No, really, I literally mean just around the corner. In one instance, I remember the pizza place that was up the street offering a free large pizza when you apply with the credit card company that had a booth set up inside the store. And we all know hungry college students cannot resist a free pizza! Also, income levels for students are typically very low. Many students do not have jobs while in college and those that do usually work part-time. The small amount that they make goes towards; well, let’s just say it does not always serve as a means of payment on their credit card.
Unfortunately, many students believe that they have the rest of their lives to pay off their credit card. This can be the worst scenario. For a student, the importance of paying off your credit card in full each month should go without saying. Good credit will result and the benefits will be amazing in the near and far future. However, students continue to make the minimum payments, if any at all, and rack up more credit card debt than they can handle.
