Before leaving college, make credit counselors and debt management plans your friends!

On April 2, financial guru Ken Kamen spoke at the University of Pittsburgh, a large Southwestern PA college. One of his memorable comments was that college students typically don't learn “financial literacy.” Kamen believes that much of what college students learn has little practical knowledge: some of the most important life skills such as debt management, responsible use of credit, and strategic retirement savings are not taught in the classroom. If you're in college, and are struggling with debt management, Advantage CCS can help. We offer credit counseling and online credit counseling sessions to students, as well as comprehensive debt management plans.

Many college students have already amassed significant debt, believe it or not! The College Board compared borrowing statistics for American undergraduate students between 1993 and 1994, and then again between 2003 and 2004. The institution found that undergraduate federal loan borrowing rates increased by 125 percent in just a decade! Moreover, the value of loans borrowed increased by over 150 percent in that decade. Sadly, while students are spending more borrowed money to go to school, the amount of “free money” in the form of grants and scholarships is on the decline. The Federal Reserve Bank of Minneapolis reported in a Dec. 2005 article that “in light of tuition hikes, a Pell [grant]'s purchasing power has been on the general decline.”

What does all of this mean for students? It means that most students are borrowing money to go to school. And for those students who haven't learned debt management and finance skills, graduation day is too late to learn how to manage money.

College senior or new grad in debt? Advantage CCS credit counseling and debt management sessions can help.

Kaman's funniest quote during his University of Pittsburgh speech might have been, “Managing money is more vital than your beating heart.” He probably isn't completely serious. However, it is true that debt hampers your purchasing power. You're less likely to be able to afford quality medical care, shelter that won't make you sick (the infamous “shoebox starter apartment” for new grads – commonly found in larger cities like New York -- has a bad reputation for a reason), and nice clothes for work.

If you have student loan debt, and don't yet have a concrete plan for managing it as graduation approaches, give Advantage CCS a call. We can help you enroll in a free credit counseling session or online credit counseling appointment. There, you will be able to learn exactly what your financial situation looks like. Your credit counselor can help you determine your credit score, understand exactly how much debt you owe, and discover what options you have for paying that debt off. If necessary, our counselors can help you learn about credit cards – how to use them, how to pay them off, and what types of credit to avoid.

The College Board has unkind words to say about credit cards. The online version of its 2001 publication Credit Card Smarts states, “Credit cards are not free money. In fact, they're really high-interest loans in disguise.” Too many college students fall into the trap of treating plastic like cold, hard cash, however. Don't have enough money for a pizza, a beer, or a concert? No problem – just put it on a credit card!

This type of spending is seductive at first; there appears to be no accountability. However, if you rack up purchases and don't pay them off – or, only pay the minimum due on each bill – the total amount of money you will owe after college can really add up. And interest is added to those credit card debts – so, by the end of school, you might wind up worse off financially than you would have been had you never applied for a credit card at all! Ken Kamen agrees. He told the Pittsburgh college crowd that poorly managed credit-card debt lowers individual FICO scores. And, a poor credit score can prevent a college student from obtaining that which he or she worked so hard in school to achieve – financing for a new car, a mortgage on a home, a nice wedding, and more.

Good money and debt management habits needn't wait until you've gotten your diploma, however. You can change your spending and saving habits any time. In credit counseling, you will also be asked to examine your attitudes towards money. You might be surprised to learn how much of your money each month goes toward frivolous purchases. Maybe you can stop ordering pizza three nights a week. Or maybe you can invest in some gently-used duds instead of splurging on high-end designer clothing. If you're in college and racking up debt from student loans and credit cards, don't despair – Advantage CCS credit counseling is the place to be if you want to change your habits now!