Jan 20, 2009

A College Survival Guide to Finances

by Mandi Forth

Ramen Noodles are one of the most commonly purchased and consumed food items incorporated into the daily diet of a college student. The culprit behind this noodle epidemic can be tracked to one of the most pressing issues in the world right now —finances. The country is having problems with the economy, and most students are feeling the rumble in their wallets.

Junior Stacy Bethel has felt this economic problem so close to home that she had to take this semester off to work.

“My dad has tried to help me get through school, but with the economy the way it is, his company is going under,” Bethel said.

Many students have sought the help of student loans to take up where their parents or scholarships have left off.

“Student loans were too intimidating. I felt it would be better to work and make money, rather than borrow it,” Bethel said.

The average loan taken out through all of the loan programs by a Liberty student is $21,171, according to the Financial Aid office. This can be a daunting figure for students to pay back after graduation. For students who have graduated and are having to pay back their loans, the average default on loans is 2.8 percent, which is below the national average of 5.2 percent.

Robert Ritz from the Financial Aid office advised students that taking out a college loan is a much better investment and has a much greater return rate than taking a loan out to buy a new car.

“Studies have shown that lifetime earnings are much higher for college graduates overall,” Ritz said.

According to the Dean of Business Bruce Bell, staying in college and continuing to invest in your future is a great financial decision.

“I think the wisest thing a person could do, especially in a situation like this when we’re in a somewhat ailing economy, is get as much of an education as you can now, to put you in better stead for the future,” Bell said.

Despite having to take out loans, which Bell expressed was a genuine concern, students would still be better off since their loan would be an “investment in their future.”

Vice President of Student Affairs Mike Hine suggested that students not be discouraged by the economic situation.

“They should be open to employment that may not be exactly what they expected,” Hine said. “I have observed recent graduates who aggressively sought employment, found work, though it may not have been in the field they originally (wanted).”

While still in college, there are several mistakes that college students frequently make. For commuter students, one of the worst things to do (without a meal plan) is eat on campus instead of bringing a packed lunch or taking that quick trip by Starbucks.

“If a student drinks two cups of Starbucks a day and possibly gets a muffin, that student spends around $8 a day. Multiply that by a year, and that is a lot of money,” Bell said.

In fact at $8 a day, the expense turns into $40 a week, $600 a semester or $1200 for a school year.

Bell recommended a few tips to help students learn to cut back on spending. Do not use credit cards unless the balance can be paid at the end of the month. Take a personal finance class (BUSI 223) and learn how to manage money while in school and how to invest after graduation. Bell said that the most important of any advice that he could give would be to not “seek instant gratification.”

Many students expect the standard of living that their parents enjoy, without realizing that their parents have spent years acquiring financial security. Instead of wanting something and going in debt to buy it, Bell suggests that students begin setting aside a little bit of money, or ask a relative (if reasonable) to get it for you for a birthday or holiday.

Liberty offers many resources to help students with their finances. Dean Bell recommended that students read the book “Millionaire Mind” by Dr. Thomas J. Stanley. The Career Center is also working on organizing some events that will invite outside speakers to help them better manage their finances. There are also Web sites on the Financial Aid office Web site where students can watch short TV clips about how to better manage their finances while still in school.

Contact Amanda Forth
at ajforth@liberty.edu.

 


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