There is much more to work-study than just the monetary benefit.
College is first and foremost about earning that all-important degree. Successful students always remember why they are in school and structure their time according to the academic demands placed on them.
But a growing body of research reveals that working on campus while in college pays enormous dividends for students. Those benefits come not only in the form of some much-needed cash to help with the college bills, those opportunities provide students a breadth of experiences that help them better round out their college years.
On-campus work-study programs provide students with part-time employment options during their college years. These programs come in two basic formats: Federal Work-Study and non-Federal Work-Study, often called Student Work Initiative programs.
Federal Work-Study (FWS) is actually a form of financial aid that is awarded to students based upon demonstrated financial need. Therefore, to be awarded Federal Work Study students must first fill out the Free Application for Federal Student Aid (FAFSA) as well as any other financial aid documents required by their school.
Ultimately, to be awarded Federal Work Study a student must meet certain financial eligibility requirements. And to be considered for this option, students must also check “yes” on the FAFSA form where it specifically asks if you are interested in student employment. If you are eligible for Federal Work Study, your financial aid award letter will indicate as such.
While most students work from 10 to 15 hours a week, the amount of hours and thus the sum of money you will be allowed to earn cannot exceed the total amount noted in your total FWS award. It is also important for students to realize that qualifying for FWS will enable them access to specific job opportunities but that students will still need to interview for and secure the actual position (sometimes only a formality but for the best work options more than one qualified student will often be seeking a specific position).
Non-Federal Work-Study (non-FWS) or Student Work Initiative programs are not based on financial need. If you filled out the FAFSA only to learn you did not qualify for FWS, you can still inquire about student employment opportunities on-campus.
Though work options always will exist off-campus, on-campus work-study provides students two key advantages. First, transportation to and from work will never be an issue. Second, on-campus employers are far more accommodating regarding your need to place school first in your life. Therefore, they are more likely to provide you that much-needed flexibility when exams pile up.
And it is important to note that one of the best aspects of Non-Federal Work-Study or Student Work Initiative options is that there is no limit placed on earnings. Therefore, at times when other students are not interested in working you can pick up even more hours should you want to do so.
Benefits of On-Campus Employment
There is little doubt that most college students take a job for the financial benefits associated with it. For some, work is absolutely necessary to help them pay their related educational expenses. For others, employment provides some basic spending money for incidentals and for treating themselves to the occasional night out.
Though most students do work while in school, some believe that working during college serves as a distraction from what should be a student’s primary focus: their academics. But the 2008 National Survey of Student Engagement demonstrated that working while in school was positively associated to student engagement.
Similarly, it is now clear that the work-world can serve to enrich the college experience. Far from being a distraction for students, working during college has proven to be one of the places where students develop two critical employment and life-related skills: teamwork and time management.
Even working in the school cafeteria can help students develop fundamental work habits. But securing employment with a specific department related to your field of study can provide students with the potential to deepen and enrich what they are learning in the classroom. Perhaps most importantly, working students find their on-campus work experiences help them clarify their career aspirations.
For all of these reasons, the idea of working while on campus is fundamental to the mission of such work colleges as the College of the Ozarks, Alice Lloyd and Berea. These colleges make work and service a fundamental of their educational philosophy.
Give Careful Consideration
Clearly, students can benefit significantly from working while in college. Everything from reducing the amount of money they borrow to rounding out the college experience makes working while in school often one of the most important aspects of the college years for all students.
Such experiences can of course be gained off campus also in the right setting and with the right employer. So those options are deserving of pursuit as well.
But students interested in work-study will generally find a wealth of options on campus where flexibility reigns and transportation is simply not an issue.
When it comes to students choosing where to apply to college, there is growing evidence that the total cost of attendance is not given enough consideration. In fact, the failure to discuss how students are going to pay for school is called the “Pink Elephant in the Room” by Anne Richardson, the Director of College Counseling at Kents Hill in Readfield, Maine.
A new report from the College Board and the higher education consulting firm Art & Science Group LLC, confirms Richardson’s assertion. The new study reveals that many students consider colleges that they simply cannot afford to attend.
More than a thousand high school seniors were interviewed in the study. Participants were randomly selected and interviewed on two occasions.
In the early part of winter students were asked where they were thinking of applying to college. In addition, the researchers asked students about the challenges of paying for school. Just over 900 of those students were then randomly selected for a follow up session in late spring where they were asked the same set of questions.
In the first set of interviews, 63 percent of the students indicated that they and their families would have a hard time paying for college. In the second set of interviews, 59 percent continued to indicate that they would have a hard time paying for college.
However, though it was clear that the cost of college was going to be a significant challenge for more than half of the respondents, the students clearly had done very little work towards determining how they were going to pay for school. Despite the large number of web sites offering financial aid calculators, 40 percent of the second group of interviewees still had not used an aid calculator to examine how much they and their families would be required to pay.
The most disappointing element was the number of students who indicated that they were going to “work out how to pay” for school when the time comes. While 24 percent of the early group gave such a response, come spring, when the time was now upon them, 22 percent still gave the very same answer.
In addition to not having done any additional work as to how they were going to pay for school, the respondents also clearly lacked a basic understanding of what payments they would have if they borrowed for school. For the first group polled, 40 percent said that they had “no idea” what their loan repayment would be on a monthly basis. For the second group, 39 percent said the same thing.
Sadly, too many students focused on school prestige and strength of academic programs exclusively and gave little regard as to how they were going to pay for these schools. Simply stated, those polled were not giving enough thought as to the affordability of specific schools.
Art & Science group principal Richard A. Hesel told the Chronicle of Higher Education that he is worried about this disconnect, that far too many students are unrealistic about how they will pay for college. He goes on to insist that “institutions have to work much harder to monitor what’s going on with students and stay in touch.”
While we agree with his assessment to an extent, we must insist that students and families also own a piece of this problem. There needs to be a critical discussion at some point that focuses in on how much is “too much to pay for college.”
Of course, that value changes if one has to borrow significant sums to earn that all-important diploma. If one is of unlimited means, then the question becomes essentially moot, the prestige and programming at the most expensive schools is likely the way to go.
But if one has to take on debt the question as to how much is too much is a fundamental one for students and parents. Depending on one’s future earning power, borrowing can become a real problem.
The fact that students and their families are not tackling the “pink elephant” in the room is appalling. The failure to have this discussion is clearly one of the key reason’s why student debt has reached crisis stages.
We recently reported on an extremely negative piece of news for college students: today, the debt load from student loans has actually surpassed that of credit card.
For too long we have been a nation of borrowers. That culture has created a disastrous situation for many Americans who borrowed too much for their homes, placed too much debt on their credit cards, and as we now know, borrowed too much money to attend college.
The folks at CollegeScholarships.org have published a scathing rebuke of the current student loan system. First they reiterate our point from the prior post – once upon a time, Americans were swimming in credit card debt. Today, they are drowning in student loan debt.
Their graphic represents a complete indictment of the current student loan process. By the time you are done reading you will begin to think that the entire student loan culture is designed to bilk you.
Of course, to take advantage of you, loan agencies need you to be complicit in the process. Yes, they make the entire process very enticing. But you the student (and your family) have to agree to these loans and their respective terms by placing your signature on the loan documents.
Before you do sign, be sure to pay close attention to what CollegeScholarships.org has to say. One of the most critical points centers upon the legal changes that have taken place in recent years.
The result is that as of 2005, college loan debt is nearly impossible to discharge. Student loans are exempt from a number of fair practice laws: statue of limitations on collections, the Truth in Lending Act, the Fair Debt Collection Practices Act, adherence to state treasury laws and the right to refinance.
Furthermore, the harshest collection techniques are often used to collect student loan debt. They include wage garnishment (which can be done without a court order), the suspension of state professional licenses, garnishment of social security-disability incomes, and withholding your tax refunds.
All of this and a great deal more is available in the graphic. And the final piece that every student should be aware of is that 25% of all government student loans go into default. Furthermore, 30% of those students borrowing to attend community colleges and 40% of those borrowing for two year colleges go into loan default.
These figures match or exceed the numbers (25% in default) from the recent subprime home loan debacle that has crippled our economy. But in the case of home loans, a person can essentially walk away from the loan. Yes, they lose their home. And yes, their credit rating plummets.
But ultimately, they can simply turn the house over to the bank and move on with their lives. No future wage garnishments, no withholding a federal tax return, and no suspension of a state license.
On the other hand, as we noted that is not true for student loans. You cannot walk away from them – you own them for life.
It is important for students to realize that the credit card debt crisis (and the subprime loan fiasco) has spurred a whole new culture among a large segment of our population. Actually it may be new to us but in reality it is the return to the pay-as-you-go philosophy that earmarked our grandparent’s generation.
As you seek sources of funding to help pay for college think twice about borrowing. A good many people have already decided that a return to a pay-as-you-go philosophy is a good step for credit cards.
But if it is a good step for credit cards, then it is likely a must step for college. Because, as the College Scholarships.org graphic points out, those college loans will follow you everywhere.
With permission, we present the graphic here.
When it comes to dealing with the cost of college, politicians have provided some significant help for many families.
One of President Bill Clinton’s signature policies involved the development of the Hope Credit. Designed to help middle class families with college expenses, the credit has proven to be of immense help to legions of families since its inception.
But in what has to be some of the best news in recent years for families with college-age students, the Hope Credit has been significantly tweaked in a most positive way. In fact, the only major criticism could well be that the adjustments are currently in place for just tax years 2009 and 2010.
The Original Hope Credit
Once upon a time, a single parent with an income below $48,000 a year (partial credit for those between $48,000 and $58,000) or two parents filing jointly who had combined incomes below $96,000 (partial credit for those between $96,000 and $116,000) were eligible for the Hope Tax Credit. The maximum amount of credit that could be claimed topped out at $1,800.
The credit could be taken against 100% of the first $1,200 in qualified tuition and related expenses that had been paid by the family and 50% of the next $1,200 spent. Therefore, if a family spent more than $2,400 in qualified educational expenses, they would see their federal tax bill reduced by $1,800.
However, the Hope Credit was available only for the first two years of college. In addition, you had to pay federal taxes to receive any benefit and of course had to pay at least $1,800 in taxes to receive the full benefit.
The American Opportunity Tax Credit
The first change to the Hope Credit, now called the American Opportunity Tax Credit, for 2009 and 2010 is that the maximum amount of the deduction has been increased to $2,500 for those eligible for the credit. The maximum comes from a dollar for dollar tax deduction for the first $2,000 paid in tuition and fees followed by 25% of the next $2,000 spent.
Second, for single filers the income restriction has been raised to $80,000 (partial credit for those between $80,000 and $90,000) and for joint filers to $160,000 (partial credit for those between $160,000 and $180,000).
Third, the credit may now be taken for the first four years a student is in college.
And fourth, up to 40% of the credit can be refunded to those who paid less than $2,500 in federal taxes. For students not claimed as a dependent on their parent’s return and paying no federal income tax, they in essence can become eligible for a $1,000 tax refund at tax time.
Very Positive Step
Therefore, if you are, or your child is within the first four years of earning a college degree, the American Opportunity Tax Credit provides significant tax breaks. However, it is very important to understand what expenses qualify.
If your college tuition bill including course fees is $5,000 per semester ($10,000 for the year) and you receive scholarships totaling $8,500, then the out-of-pocket expense, the $1,500 is the amount eligible for the tax credit. But the phrase “qualified tuition and related expenses” has also been expanded to include expenditures for “course materials.” Course materials include books, supplies, and equipment directly purchased for a student’s course of study.
Students and their families should be reminded that plenty of other tax incentives do exist that are irrespective of the number of years in school including the Lifetime Learning credit or the direct income deduction for tuition-and-fees. The key is that the government will not let you piggyback or pile these options up. Instead, you must utilize one specific element.
And of course, if you are a parent or student that will have college expenses beyond 2010, you may want to write your congressman. As noted earlier, the American Opportunity Tax Credit is currently available only for 2009 and 2010.
A college degree can be affordable
Justin Pope, writing for the Associated Press, pulled no punches regarding the ongoing increase in college tuition for 2009-10. With costs rising anywhere from 4.4 percent at private schools to 7.3 at community colleges, Pope stipulated that colleges were handling the recent recession by simply passing “much of the burden of their own financial problems on to recession-battered students and parents.”
Those ever-increasing costs, consistently higher than the rates of inflation, have a number of folks questioning the value of a college degree, especially as students pile up exorbitant amounts of debt in their pursuit of a diploma. While we agree that absorbing significant debt while earning a diploma is a bad idea, we do still believe there is great value in obtaining your degree.
One only need examine the recent numbers from the economic downturn to find the necessary support for our assertion. While millions of young people are out of work, the percentage of those unemployed who have a bachelor’s degree is about half that of those without a degree.
But the ultimate key is to find a way to earn that sheepskin without mortgaging your future in the process. Scholarships and grants can certainly help students on the funding side immensely, but for those with a mindset, there are a number of ways to dramatically reduce the overall costs of earning a college diploma.
Reducing College Costs
The first aspect of controlling your college costs is to simply examine the cost of tuition by school categories. Here are the numbers as reported by the College Board:
These numbers are definitely the first ones to analyze, but when looking at ways to reduce this cost, there are two critical elements to these figures.
First students must look at the cost per credit hour. When examining the published cost, students must look carefully at both the published tuition per credit hour and the latest college invention, fees that are generally listed as added costs that can raise the price burden per credit hour significantly.
Second there is the credit hour issue alone. Most degree programs require 60 hours of study for an associate’s degree and 120 for a bachelor’s. If you can reduce the number of credit hours you must pay for you can significantly reduce your cost of overall attendance.
Step One – Reducing Costs per Credit Hour
For 2009-2010, the tuition and fees at public two-year community colleges would produce a per credit hour average of about $85.00 ($2,544 in total costs divided by the average course load of 30 credits). In contrast, we see that the average cost per credit hour for in-state students would be $234 for public schools and $876.00 for private.
So the first step to controlling costs per credit hour is to examine the best way to obtain your desired degree. Simply-stated, unless you have unlimited funds for school, a well-to-do uncle or grandparent, forget about those expensive private schools.
While private schools may boast of providing a better product, it is important for prospective students to understand that college is what you make of it. In fact, many of today’s top business leaders graduated from public institutions: Warren Buffett, CEO of Berkshire Hathaway attended the University of Nebraska-Lincoln. H. Lee Scott, the CEO of Wal-Mart Stores, attended Pittsburg State University in Kansas while James Sinegal, the CEO of Costco Wholesale attended San Diego City College.
Therefore, the first way to manage you college costs is to attend a public college, generally a campus of your state university system. I know: that just might not sound so exotic when you are discussing the topic with family and friends. But it is important to realize that exotic costs bigger bucks.
Second, if you truly want to minimize costs yet obtain a diploma, the most cost-effective road would be to earn your first 60 credit hours (years one and two) at a local community college, then transfer to a public state university school for your final 60 hours (years three and four). Even attending community college for one year would represent an enormous reduction in college costs.
There would no doubt need to be some initial homework to determine which community college credits would be transferable upon matriculation at a state school. You might even have to do some negotiating, but many of the mundane course requirements of any degree program could certainly be addressed at a community college. And if you find a course will not transfer, don’t take it. Save your funds for later. All total, with a little effort you could knock off more than a year’s worth of the higher-priced tuition costs.
Step Two – Reducing Credit Hour Costs
The second way to dramatically decrease your college costs is to reduce the number of credits you must pay for at the required tuition rate. There are almost an unlimited number of ways to reduce the number of credits that you must shell out funds for, but a good many of them must be accessed while you are still in high school.
For example, taking Advanced Placement courses can result in potential college credit. Such courses are often available at your local high school either by direct instruction or through the school in online format.
Students gain access to college-level curricula and upon completion of the material may take an exam to determine mastery. Passing that exam can provide college credit at a large number of colleges across the country.
Students may also take the College-Level Examination Program® (CLEP) tests in 34 different subject areas. These exams, at $72.00 per test, can provide anywhere from 3-12 credits at certain colleges at a fraction of the cost.
Today, many local colleges also offer courses to high school students in their area free of charge (referred to as early college). Again, given the cost per credit hour, students should investigate such options extensively and take advantage of what is available.
In all instances, including the possibility of seeking life experience credit for a work portfolio, the key is to do one’s homework up front. That means sitting down with college officials to review what credits the school will accept when a student does enter that respective institution.
For example, some schools will not accept AP classes whatsoever. Others will allow credit only provided students score a four or five on the exam (even though a three is considered a passing score).
While in college, another very distinct option to reducing credit-costs is referred to as the co-op or internship experience. Here again, the concept is dependent on the school one attends.
Co-op and internships provide students practical learning skills in a specific field through the use of work placements. In such programs, students may receive either pay or course credit for their time. If the experience is in your field of study, the work-related insight one gains is incredibly valid for one’s future career.
At the same time, many such experiences also offer college credit when students combine the proper reflection and academic review to the work experience. In certain instances, these experiences serve as a triple benefit, providing some cash to help pay the bills, some college credits to reduce the number that must be paid for, and even the possibility of potential job placement opportunities that can form as a result of the connections one makes while performing their service.
Reducing Miscellaneous Expenses
In addition to the tuition costs, students face a number of other related expenses while working towards that diploma. Such costs include room and board, books and supplies, and travel expenses.
The bottom line is these costs cannot be categorized as mere incidentals, certainly not when repeated over a four-year period. Once a school is chosen, tuition costs are set but students still have decisions that can greatly reduce the incidentals that accompany tuition costs.
Step Three – Eliminate the Room and Board
One way to reduce your four year college outlay is to rethink the idea of room and board. While many cringe at the thought, it is imperative that students understand the current going rate for room and board is now $8,193 at public colleges and considerably more at some private, elite schools.
Examine that number carefully – it is more than the average cost of tuition at four-year public schools. And it is more than triple the average tuition costs at a two-year community college.
Now spread that out over four years – a total of more than $30,000!
The simplest way to reduce this expense is to live at home. Such a decision becomes a possibility if you consider the community college/state university combined four-year plan we mentioned earlier. It certainly becomes viable if you consider community college for the first two years at a minimum.
If your home residence is simply too far away, you also need to carefully assess the school rates for both the housing and the meal aspects.
It could well be far cheaper to lease an apartment or house, especially if you can find others to share that cost.
In regards to meals, most school plans represent a significant cost per meal. In addition, missed meals seldom produce anything in the way of refunds if you do not access them. So when purchasing any meal plan, be sure it is a plan you will access.
There is no doubt that living at home limits one of the indirect benefits of college, the activities available and the connections made on-campus. To obtain those experiences, students will have to work harder at this element. But the experiences are available to all students, even if you are not residing on campus.
Step Four – Distance Learning Courses
Once available primarily at for-profit institutions, online learning is now available at a multitude of schools including state university systems. Completing one or a number of online courses can greatly impact your miscellaneous expenses.
We noted earlier the need to take into consideration fees when calculating tuition costs. Online courses often allow students to be exempt from a number of facility and campus-related fees such as student activity, campus access and technology fees. At one Florida school that lists tuition costs as $50.00 per credit hour for in-state students, those costs move to $150.00 per credit hour when all the fees are factored in.
In addition to potentially eliminating these on-campus fees, online courses also eliminate travel expenses and room and board entirely. They also can be a key component of our final savings step.
Step Five – College in 3.5 or 3.0 Years
While tuition costs are per credit hour and programs mandate a specific number of credits, miscellaneous expenses occur each semester. So one of the simplest ways to reduce total outlays is to reduce the number of semesters you are at school.
That reduction can of course come from the aforementioned reduction of credits needed. It is for this reason that AP courses, CLEP tests, Co-Op programs and Internships compound your savings, reducing costs at both levels.
But it can also come from taking additional courses each semester. Taking one extra course, either via online methods or simply taking another traditional class, for just five semesters will reduce your program from 4 to 3.5 years. Taking two online courses each summer and one extra traditional class each semester could reduce your college program to 3 years. Prerequisites can make this a challenge but with a little effort you can reduce the standard four-year program.
Remember, such steps would carry tuition costs per credit hour, but they would greatly reduce the costs of room and board and those incidental traveling expenses associated with attending school.
Control Your Expenses and Earn Your Degree
While costs are growing substantially, it is important for students to know that out-of-pocket costs have trended down in recent years. In fact, while tuition and fees have risen as much as 20% since 2004, the average net price of college has dropped over the last few years.
The reason is the greater availability of grants, financial assistance and tax benefits.
Of course such developments make it all the more enticing to consider our steps to cutting the costs of college. According to a recent Time article, the increased aid development means that the “average student at a two-year college or university pays nothing in tuition and fees and collects about $500 toward living expenses.”
Of course, marketing is what drives the business world – if you package your product well enough, people will seek to acquire that product at all costs.
Generally speaking, all colleges have taken advantage of this concept. But some, specifically those elite private schools, have done so to the extreme.
The result is far too many students are being enticed, taking on ridiculous levels of debt as they attempt to obtain a diploma from a school they simply cannot afford. It is time that students, as well as their parents, went back to the old school adage, finding a quality product at a price they can afford.
With a little work and a certain level of sacrifice, students can earn that coveted diploma without mortgaging their entire future in the process.
We have frequently highlighted the roll of social media in college, even when it turned out to be a bad fit. Some professors have taken a liking to it, particularly note passing on Twitter. Going one step further, College Scholarships is incorporating Twitter into a scholarship now. Students may enter the 140 Scholarship by Tweeting their answer to the following question “how we Twitter be used to improve the world?”
If you are a college sophomore or upperclassman, you have experienced the full-frontal assault of the end of the year dorm clean out.
Because some students have exams right through Friday afternoon, then have only until 12:00 p.m. Saturday to be out of their room, there is no time to appropriately deal with all the items in the dorm room or on-campus apartment. Not only is there simply too much accumulated stuff to fit all of it in your car without making multiple trips home, you simply don’t have the time to deal with breaking the stuff down so that it might fit.
The result, loads of valuable items get tossed into the dumpster or in most cases by the end of the week, piled alongside an overflowing trash unit. Chairs, couches, tables, VCRs, and even television sets can be seen sitting on top of these containers or resting on the curb beside these huge bins.
Perhaps the most appalling aspect is the realization that the space in your car is already spoken for yet you are now witness to literally piles of items that you would scoff up in a minute if it were the beginning of the school year.
Schools and Students Taking Action
More and more, as green-eyed students across the country become aware of the earth and the need for greater sustainability, recycling programs have started to emerge for this end of the year clean out. The goal is simple: reduce the number of reusable items heading to a landfill or transfer station and get them into the hands of another potential user.
There are many successful ways to deal with the process. One simple step is for a group of students to locate a place for storage of viable items, especially the larger units such as mini-refrigerators and other electronic gear. Then, using a group of student volunteers, these unwanted items are collected and taken to the storage facility to be sorted out.
The following fall, those very same items are put up for sale to the incoming students at the school. Any collected funds that remain after the costs of storage have been taken care of are either donated to worthy charities or to the school’s nonprofit sustainability organization to further sustain a school’s green mission (if one exists).
Another common method of dealing with the leftover items is to involve community organizations and use them to solicit volunteers for all the handling tasks as well as the storage of items. Instead of selling them to students, the collected items can be sold in a massive community yard sale. Later, the proceeds from any sales can then be divided among the nonprofit groups according to the time each specific organization puts into collecting and selling the items.
Want to Start a Program?
Many other programs are underway with variations on these themes. In certain instances, students can simply leave unwanted items in their dorm room where they will be collected later.
Still, there are a number of schools where the idea has not caught on.
If you are interested in getting such a program started at your university, a nonprofit called Dump and Run helps interested groups. They can offer ideas regarding item collection, donation and storage, as well as appropriate ways of handling the cash that comes from selling the collected materials.
If the end of the 2009 school year has come and gone and your school still is not on board, it would make a perfect project for next year. Students interested in starting a program at their school can contact Dump and Run for assistance and advice.
Ultimately, the end-of-the-school-year recycling program is a true win-win. No student ever feels good about throwing such material in a dumpster. And our landfills/transfer stations are already strapped with mountains of trash.
High school students looking to learn more about the college application, admissions and choice process have a great upcoming opportunity next month.
CollegeWeekLive, the world’s biggest virtual college fair, has been set for March 25th and 26th. Featuring more than 250 colleges and universities from around the world, the annual event is expected to see as many as 28,000 attendees.
What makes CollegeWeekLive so unique is that it offers all of the standard college fair information that students seek when attending such an event but does so in an online format. Therefore, from one’s home or school computer, a prospective college student has access to a wealth of information in a cost-effective and convenient manner.
The bi-annual event (held each November and March) offers students access to some of the top experts in the field. Virtual fair attendees can watch admissions experts speak on SAT preparation, the application essay process and or how to pay for college. Attendees will also be able to ask various questions via live chats.
The event will also feature virtual booths for the various colleges taking part in the fair. These booths will offer student attendees electronic brochures, videos, webinars, and podcasts related to the school. In addition, students will have the opportunity to real-time Instant Message and/or video chat with admissions counselors and students from those institutions.
As for the specific, potentially-valuable presentations for students March 25th offers:
More details on the proposed agenda as well as relevant links to some of the presenters are available on the CollegeWeekLive agenda page.
Though the program should be extremely worthwhile, as an added incentive to folks, College WeekLive will be giving away a brand new 13-inch aluminum MacBook to one lucky attendee of the fair! . There is a video contest and the chance to win a $2,500 scholarship to the college of your choice.
And if you attended the November CollegeWeekLive and are still a current high school student, you can also complete a survey that will make you eligible to win an iPod Touch or a $300 donation to the charity of your choice. High school seniors will find the link to their survey here while underclassmen will find a separate survey at this location.
We recently published a guide to personal finance for students.
We would love to hear your feedback about it, and if you think your readers would appreciate it, please help spread the word. 🙂
In our prior post, we took students on a walk through some key components of personal finance. Our focus was on “good” debt (loans for college) versus “bad” debt (credit card debt) and what loans to consider, all with the idea of minimizing the debt students accrue while in college.
Today we spend some time with Kai Davis, a senior at the University of Oregon, who will graduate this spring with zero debt. Majoring in Economics and minoring in Business Administration, the Eugene, Oregon native offers readers some great insight into how to manage one’s personal finances.
To provide students a thorough look at how Kai has managed to earn a degree debt-free, we present our discussion with him in question and answer format.
As a freshman, did you make it a goal to graduate with zero debt?
No, it wasn’t ever a plan, but I was able to achieve it. I’ve always felt that having a smaller goal like minimizing my debt would be better than a hard and fast rule of no debt. I’ve found that I’ve made the biggest impact on my savings when I’ve adopted a few small rules. I only carry a credit card with me to earn rewards points and fill up my gas tank (I earn 5% back when I use my Chase Visa at a BP gas station). Instead I carry a small amount of cash with me. When I have the impulse to make a larger purchase I wait a few days, assess the need, check my budget, and see if I can afford it. I always want to make my purchase fully aware of costs beyond the price tag.
I think that understanding how to manage your money intelligently and aggressively is the most important skill that students can leave college with. A degree shows that you have the drive, intelligence, and ambition to complete 4 years of course work. It doesn’t give you a job in that field or even the desire for a job in that field. But understanding how to manage your finances is a skill that stays with you for life.
So, graduating without debt isn’t the skill to focus on. Graduating with the ability to understand personal finance is.
Everyone talks about the rising costs of college and how students today have to borrow money to be able to pay for school. How have you been able to graduate with no personal debt?
I was already planning on attending the University of Oregon due to its strong business program. I was able to save quite a bit of money by living at home for the first 3 years of college. I’ve worked 20-30 hours each week throughout college, either at work-study jobs or on start-ups with friends. I’ve found that spending a lot of time working during college doesn’t have to come at the cost of academic success. Rather, spending a good amount of time working during college has given me the ability to triage assignments by importance and complete my academic work in the minimum amount of time.
So your choice of school was critical to your current situation?
No, not at all. I’m lucky that the University of Oregon offered a strong Business Administration major and is an in-state school, so tuition was cheaper, but I’m fairly sure that any industrious student can manage their finances well in college if they take the time to learn the system.
Are there any other steps you have taken to earn additional money?
I’ve always worked on campus in work-study jobs. Its great for networking, learning new skills, and earning money while in college. I’ve also taken recent aggressive steps to manage my money by taking advantage of high interest savings and checking accounts. I switched from a bank paying me 1/10th of a percent interest annually to a bank paying 3.8% annually. If you’re committed to saving, the money quickly ads up.
Can you talk a little bit about credit cards and how you have managed to remain on top of credit card debt?
As a college student you’re existing on a small budget and lines of credit from the school and banks. Let’s say you spend your budget quicker than you anticipated and are left with only your credit card for the month. Every purchase you make on the credit card ends up costing you more to pay it back. I’m not saying don’t make purchases on your credit card – I often do – but be mindful of how long it will take you to pay it back. When I hit the cap on my monthly budget, the first thing I do is assess which planned purchases I can cut back on. I’d much rather go without seeing a movie than having to pay that purchase back plus interest. While seeing a movie might be with $7 cash out of pocket, it isn’t worth $7 + compounded interest on a credit card.
So you would recommend that students set up a budget?
When I first moved out, I set a budget to plan out exactly how much I’d spend on food, utilities, gas, everything. I quickly found out that a budget often serves more as a sketch for spending than the actual spending. Some months I spend more on food than I anticipated, some months I spend much less. I use a budget to figure out how much I think I’ll be spending on average, and then use the final budget total for my monthly planning. If at the end of the month I’ve only spent 90% of my budget, I take a look at what I thought I’d be buying compared to what I did buy and see if I can trim my monthly estimate. More often than not I’ll treat myself with the unexpected windfall or deposit some money into savings. Establishing a budget so you have a general idea of what you’ll be spending in a month is much more important than nailing down the exact values you’ll be spending.
Have you made it a point to focus in on your credit rating?
I think understanding how to use credit is as important as your degree. A horrible credit rating can harm you for a few years, but it doesn’t have to be the end of the world if you rebuild your rating. If you graduate college with bad credit, you have years to repair the credit before you start making those big purchases: a car, a house, a boat. One of my close friends graduated college without a credit rating. He was able to pay for his degree out of pocket and never bothered to open a credit card. By the time he was 26 he had a nice savings account – $50,000 or so. He decided to buy a house and let his savings appreciate there. He found a nice house at a wonderful price and went to talk to the bank about a loan and was turned down. Because he had no credit rating the bank saw him as too much of a risk and wouldn’t issue him a loan.
So is a credit standing as important as a degree?
Earning a degree elevates your standing in the eyes of potential employers just as a high credit rating helps you get credit to make those larger purchases. If you don’t know how to use your degree to effectively position yourself and get a job you want you won’t have as much success during your job search. Understanding how to manage a credit rating – even a bad one! – is one of the most important lessons you can learn in college.
Credit cards and student loans are not free money. Its very easy to think that you’ll just charge purchases to your credit card, make the minimum payment a few times, and be debt free in a few months, but it doesn’t work like that.
What are your thoughts about the importance of saving?
Learning to save now prevents problems later. If a student leaves college not knowing how to manage their money, how much will their lose before they learn how to save? If you leave college understanding the importance of having a check account, setting a monthly budget, eyeballing spending in certain areas relative to your income, shopping around for the highest interest rate on your accounts, and getting a credit card with rewards or cash back and paying it down quickly, you’ll be in great shape to manage your finances.
If you had the chance to offer an incoming freshman advice on personal finance, what would be the two or three things you would most emphasize with him or her?
I’d let them know that they don’t need to lose sleep over their finances. Yes, its an important thing to manage, but if you’re smart about paying your bills and keep to a schedule you’ll be fine. College is stressful enough without worrying that you won’t have enough liquidity come graduation. Take college one day at a time, try to avoid using a credit card unless it’s a purchase you know you can afford to pay off over time, and stay happy. At the end of the day, managing finances intelligently isn’t something you have to do perfectly, but just taking the time to read the fine print and understanding how to save and spend intelligently will make a large difference.