Jeanette A. Tucker, Claesgens, Mark A. | 7/13/2007 11:49:54 PM
Sometimes financing a college education is often a partnership involving the student, family, school and a lending agency. LSU AgCenter family economics professor Dr. Jeanette Tucker encourages college students to find out each partner’s responsibilities.
"Once you know those obligations, you can adjust your flexible costs accordingly to live within your means," Tucker said. Flexible costs depend on: where you choose to live; how, where and what you choose to eat; mode of transportation; choices of entertainment, recreation and socializing; and the books, projects and fees for the courses you choose.
The family economist offers these strategies to control your spending plan:
– Always maintain the highest grades possible to be eligible for scholarships and merit awards as they become available.
– Save as much money as you can while in school to help pay your expenses along the way to reduce debt and interest payments later on.
– Be careful how you use your credit cards. Research says that more students drop out of school from problems with debt and credit than poor grades." If you owe $1,000 on your card at 21 percent interest, you will accrue interest charges of $211.15 in one year. You would have to work 41 hours at minimum wage pay ($5.15 per hour) just to pay the interest.
– If you do get into financial trouble, don’t let it destroy you or distract from your studies. Work it out. Get advice from a trusted and knowledgeable adviser, financial counselor or credit counselor.
– Maintain a good credit history. The Fair and Accurate Credit Transaction (FACT) Act allows consumers to request a free copy of their credit report each year from each of the three major credit reporting agencies: Equifax, Experian and TransUnion. Request the free credit reports online at www.annualcreditreport.com or by calling 1-877-322-8228.
– Maintain a regular schedule of sleep, work, classes, study, social and recreational activities.
Tucker offers a number of cost-reducing strategies:
– Compare the cost to attend college minus grants or scholarship assistance to see what your real out-of-pocket expenses would be. Don’t assume that you can’t attend a higher cost college until you review the financial aid you will receive.
– Attend a local community college during your freshman and sophomore years. Then transfer to a four-year institution to complete your undergraduate education.
– Compare the costs of having an apartment versus staying in a residence hall. Consider the responsibilities of apartment living and evaluate your reasons for attending the university.
– Live at home and commute to classes, but actively participate in campus organizations and events.
– If planning to attend a school out of state, consider living in that state for one year to declare residency to avoid the higher out-of-state tuition. Check out-of-state and college residency requirements.
– Compare interest rates and total costs of loans over time with different interest rates.
– Borrow just the minimum.
– Live in an apartment building where you can manage in exchange for rent.
– If you have difficulty repaying your student loan, first try to increase income and reduce expenses, then check your lender’s "forbearance policy." Some lenders lower your payments for a period of time. Always talk to your lender if you experience problems in loan repayment.
"Your greatest investment in life is your education," Tucker said, emphasizing, "Plan to reduce other life expenses to afford the enrichment and empowerment that a degree can provide."
For related family economics and consumer topics, click on the Family and Home link on the LSU AgCenter homepage at www.lsuagcenter.com. For local information and educational programs, contact an extension agent in your parish LSU AgCenter office.