A recent survey suggests students new to college are finding it hard to manage personal finances. The new study shows freshmen incurred unexpected debt due to credit cards in their first year of college.
As many students are prepared for the classroom, some may not be prepared to manage their personal finances.
“It’s not just the tuition and the books, it’s life at college,” assistant director for Strategic Initiatives for Enrollment Management Kelly Moore said.
Along with textbooks, food and tuition, unforeseen costs add up, taking a toll on wallets and their credit scores.
A recent survey showed that 35% of new students incurred unexpected credit card debt in their first year of college; most of them, hiding it from their parents. Debt for those students had banking fees range from $300 to up to $1,000.
“You’re looking at credit cards with 20% interest.”
Carey Jennings, a financial aid counselor at ISU, says she sees new students find themselves in credit card debt all the time. She suggests students should apply for work-study programs or federal direct student loans with lower interest rates.
“They’re not getting the low-interest rates that their parents are getting. They’re getting the 20% interest rates,” Jennings said.
Solutions are hard to come by. However, a new course at ISU might be an aid next fall. It’s a “first-year student success course,” with a portion dedicated towards personal finance. That portion, created by ISU credit union, is called the Bonzai Program.
“Educators can use this as a resource to incorporate with their program. After they teach about it, they can call me and I can come in and I can do a financial literacy course,” financial educator for ISU Credit Union Thipsavanh Sibounna said.
Budgeting, credit and loan management will be topics of discussion. To find out more click HERE.