Category Archives: Money Matters

How to Make Sure Your College Kid is Money Savvy

Probably the leading cause of failure in college relates to money problems. Unfortunately most kids that drop out of college to dig out of their money problems never go back, and end up badly sidetracked.
A good solution is the newly released Money Management Skills DVD, its something every college parent should get for their student. This 1 hour DVD, created by MoneyManagement101.com is designed to quickly teach college age young adults essential money skills.   Please note that CollegeTipsForParents.org was involved in the creation and sale of this DVD.
We  encourage  college parents to consider getting this DVD for their son or daughter.

In about one hour, this DVD will show your son or daughter how to smartly handle their money matters and stay on track at home and at college.

Samples of Topics Covered in the DVD:
How to stay out of credit card problems
Maintain your personal cash flow
How to stay financially focused and on track in college
How to Protect yourself on campus from ID theft, fraud and rip-offs
Plus many tips to avoid problems at home and college.
How to avoid excessive spending in college
Common money problems & traps that college kids fall into
Living within your means at College.
How not to get buried by excessive debt
Managing your bills

Important Credit Card Law Changes Parents & College Students Need to Know

Most American college students use credit cards. However, many young people don’t always handle them properly, and often face late fees, increased rates, and high balances. Many of the problems are due to a lack of knowledge, or simply not handling cards responsibly. Although many of these problems are the result of bad habits of young adults, consumer groups believe many of these issues are the result of practices of credit card companies. To help address this issue, Congress passed new laws to restrict the ways card companies handle credit card arrangements with consumers.

Credit card companies will be required to follow the guidelines:

The changes generally require credit card companies:
-to increase disclosures to card holders.
-to provide more lead time or advance notice when changing terms.
-to limit their marketing activities on or near college campuses.
-to require increased parental involvement in credit card activities of individuals under 21.

More detail of these new requirements and information on money issues affecting young adults and their parents are available on the website MoneyManagement101.org

Borrowing for College Impacting Students Futures

As a result of the increasing debt levels, college students are having to delay many life events.
The level of borrowing grew dramatically last year. The U.S. Education Department reports that student-loan disbursements—the amount borrowed by students and received by schools in the most recent school year jumped by about 25%.
These higher borrowing levels are likely due to the poor economic climate combined with the increasing costs of college. Estimates vary, however approximately two-thirds of students borrow to cover the costs of college. This percentage is significants higher than it was ten years ago. New grads are often cash strapped due to high student loan repayment requirements. As a result, they often have to delay personal milestones such as buying a house, starting a family, etc. This trend is likely to get worse for current college students.

Given the high costs of college and the common need to borrow, it is critically important for parents to make sure their student is using their student loans only for true educational costs. Unfortunately, too many students use loan proceeds to pay for lifestyle related costs and non-essentials.

We will be adding some posts with tips for lowering college costs and reducing student loan levels.

College Students are often Clueless about Money Matters

Many College Students desperately need to learn money skills.

The list below represents typical quotes from college students on the topic of money matters. A basic understanding of money management is a critical part of the daily responsibilities of college and adult life. Although many of the statements seem comical to experienced adults, they illustrate why so many young people get into financial trouble. We suggest parents spend time teaching their students money skills, or provide them with a quick money management course as the one recommended below:

Money issues are probably the top reason students drop out of college. With that in mind, our Pick of the Month is the excellent course Money Management for Young Adults – this self study video & ebook course clearly explains essential money skills that college students need to understand.

Quote examples of College Students:
-Spending $1,000 using my new credit card is way cheaper than writing a $1,000 check, because I only have to pay back $20 per month.
-The bank must be wrong, my account can’t be overdrawn, I still have 10 checks left in my checkbook
-I think someone’s ripping me off on my first paycheck, who are these people FICA and FUTA, and why are they getting part of my paycheck
-I just got my first credit card, I love it, when this one’s full, I am going to apply for a couple more.
-I am already getting credit card applications in the mail, but my mom is too uptight to let me have one. Once I move out, I’m going to get a bunch of cards, and finally get some cool stuff.
-I am going to work 25 hours a week this summer and will make $8 an hour. I’ll be able to afford that new SUV, and still save tons of cash for college tuition.
-I make $80 a week at my part time job and buy lots of awesome stuff. My parents both work full time, but they’re so cheap, they never buy anything.
-Having a ton of student loans doesn’t really matter; by the time I have to pay them back, I’ll be making the big bucks.
-I don’t worry about filling out my income taxes, my dad always ends up doing it for me, I guess he likes doing it. He’s kind of weird that way.
– I heard that collection agencies can’t bother you until you’re out of college.
– If you never leave college, you never have to pay back your student loans.

9 Tips for College Students To Reduce Info Fraud Risks

Steps You and Your College Student Can Take to Reduce the Risks of Info Fraud and Identity Theft
Presented by CollegeTipsForParents.org

College Students are frequently the victims of information fraud. The victims’ parents are often asked to help fix the financial mess and spend considerable time untangling the administrative issues.

Identity thieves often know their victims; either directly or indirectly. Thieves might be their dorm-mates, friends, siblings of friends, classmates, co-workers, current or ex-boy/girlfriends, friends from extra-curricular activities, etc.

Names, addresses, birthdates, social security numbers, account numbers, and other personal data are valuable commodities on the underground market. An ex-boyfriend could easily possess all of this info. In fact, he might even know inside information such as passwords, PIN number, mother’s maiden name, etc.

What are some of the reasons young people are frequently victimized?:

-Casual attitude about taking precautions.
-Naive about security and safety.
-Trusting (often because they have never been swindled before).
-Less likely to review their credit report for unusual activity.

According to MoneyManagement101.com , parents should talk to their kids about identity theft and information security. Although the following tips may seem obvious to experienced adults, a surprising number of young people don’t follow some of the following basic guidelines.

-Never lend your credit card or debit card to anyone, and never share your password.
-Do not print your driver’s license number, birth date, or social security number on your checks.
-When you write a check at a store, don’t allow the store to confirm your check by writing in your credit card number.
-Do not put outbound mail in your mailbox for your postal carrier to pickup. Take your mail directly to a US postal mailbox.
-If your credit card or ATM card is lost or stolen, alert your bank/credit card issuer immediately.
-Avoid using passwords or PIN numbers that might be easy for a thief to figure out (i.e. avoid birth dates, common names, etc.
-Shred any financial documents or anything containing sensitive information before putting them in the trash.
-Always check your credit card statement for charges you did not make.
-Order a copy of your credit report at least once per year. Look out for creditors on your statement that you never applied for.

We will feature additional tips and suggestions on CollegeTipsForParents.org in the near future.

Parents Save Less for College

According to an excellent article in the Suntimes, many parents putting away less savings for their children’s college education. Based on a survey by the College Savings Foundation, parents have saved less this year than last year, and a great number of parents saved nothing.

Some of the highlights of the survey include:

Parents who saved less than $5,000 per child for college totaled 65%. This includes 43% who saved $0. Savings rates were higher in the prior year.
63% of parents expect their kids to shoulder debt

70% of parents expect their kids to still be paying back loans beyond five years out, and 29% beyond 10 years out.

Student loans will be the top aid source for 37 percent of parents.

Student Loan Challenges During the Credit Crisis

Given the recent credit crisis, there will likely be greater challenges in getting private student loans. Private loans will likely harder to come by, and may be even more expensive. However, parents and students need to make sure that they take advantage of any available federal, state, and institutional aid, before looking at more expensive private student loans. It is estimated that almost half of undergrad students do not use all available low-cost federal loans their families are eligible for. They end up seeking more expensive loans from private lenders. College financial aid officers can be excellent sources of information, regarding all available programs and sources of aid.

How to Pay For Private College Tuition

There is an article excellent appearing in the online newspaper, The Ledger, entitled ‘Aid In Paying Bills For College‘ about tips for paying for admission to top-flight universities such as Harvard and Yale. The article is written by Jonathan Clements who is a regular contributor to the Wall Street Journal. Mr. Clements frequently writes outstanding articles regarding personal financial matters.

One of the main focuses of the article is that it is often easier, than college parents might realize, to receive enough grant money for tuition to schools like Harvard. What is pointed out in the article, is how even relatively high income parents, can receive substantial grant monies.

Many private colleges have become more reluctant to saddle college students (and college parents) with substantial debt. They often provide significant grant money. For example, a premier private college which costs $40,000 per year, might offer $25,000 in grant money. Whereas a top public college, costing $15,000 might not offer any grant money. So essentially the net cost the college parent and student would need to pay for (or borrow) would be essentially the same.

The article points out that it is very important to understand the aid policies of each college. The income & asset factors considered for college aid decision are often very different than the government’s evaluation criteria.

Does your homeowners insurance cover your child’s possessions at college?

What happens if your student’s possessions are stolen or destroyed on campus ? Do you need insurance at college? or does your homeowners insurance cover your students possessions at college?
It depends on your insurance policy. You should definately check with your insurance agent.
As we saw in our earlier blog entry, valuable items can be easily stolen, including bikes, scooters, computers, etc. Unfortunately, theft on college campuses is extremely common. Parents need to alert their kids about the importance of protecting their property; plus parents also need to do a bit of homework about their insurance coverage.

Let us know your experiences regarding this important subject.

Information Security on Campus: ID Theft Prevention Tips for parents and college students

Identity Theft: Prevention Tips for Parents and Students

College students need to understand how to protect themselves from falling victim to identity theft and information fraud.

Many young people have a lax attitude about security. They also tend to be more trusting of others and have a casual attitude about taking precautions. Parents and young people should talk about personal information security. They should also discuss how their individual circumstances might put them at increased risk of being victimized. Although the following tips may seem obvious to experienced adults, many young people don’t follow some of the following:

-Never lend your credit card or debit card to anyone, and never share your password.

-Do not print your driver’s license number, birth date, or social security number on your checks.

-When you write a check at a store, don’t allow the store to confirm your check by writing in your credit card number.

-Do not put outbound mail in your mailbox for your postal carrier to pickup. Take your mail directly to a US postal mailbox.

-If your credit card or ATM card is lost or stolen, alert your bank/credit card issuer immediately.

-Avoid using passwords or PIN numbers that might be easy for a thief to figure out (i.e. avoid birth dates, common names, etc.)

-Shred any financial documents or anything containing sensitive information before putting them in the trash.

-Always check your credit card statement for charges you did not make.

-Order a copy of your credit report at least once per year. Look out for creditors on your statement that you never applied for.