College is one of the most exciting, memorable times in a young person’s life. It allows you to gain an education, meet lifelong friends, and discover new passions. College can also heavily impact your financial future, because earning a degree can open doors to lucrative careers with rewarding salaries. But, money mistakes during college years can leave graduates dealing with debt and ruined credit scores for decades after getting a diploma. Insight into mistakes made by others can protect future and present college students from falling into the same traps.
Clueless about Financial Aid: Many students attend college oblivious to the amount of financial assistance that is just waiting to be claimed. According to a survey done by the Institute for College Access and Success, 65 percent of college students are unaware of their eligibility to receive financial aid, and 72 percent are clueless to the amount of scholarships and grants they may qualify for.
Credit Card Abuse: Jeet Singh, a junior majoring in geology, shared his run in’s with his new shiny piece of plastic. “My mother actually signed me up for my first credit card,” Singh says. “She told me that it’s only for emergencies, nothing more. But, I figured a few small purchases here and there wouldn’t hurt.” Singh’s small purchases quickly added up to a hefty $7,000. With no job, Singh was unable to keep up with payments, which landed him and his mother who cosigned with him, in a pit full of credit card debt. Credit cards have high interest rates and multiple layers of hidden fees. The damage of irresponsibly using credit affects both your financial state and credit rating for years to come.
Misuse of Student Loans: Student loans are supposed to be used to pay off education-related expenses, but some students misuse their borrowed funds, which causes a lot of financial pain post-college. What most students fail to realize, until it’s too late, is that the interest on these loans can add up fairly quickly, sometimes defeating the whole purpose of attending college to increase salary potential.
Staying in college too long: Yes, college is a great investment, but before enrolling, it’s important that you plan out the next four years. Extra semesters due to poor planning can cost thousands of dollars. Students should not only look into the return on investment when choosing a degree, but whether or not the intended workload can be completed within four years or less. Some degree’s, like accounting require five years to complete. Proper research can prevent unexpected expenses in the future. Stay Wise! (References: MagnifyMoney.com)