Avoiding financial burdens

From the The Brunswick News

Young adults who are financially responsible in college will be in better shape to tackle the world and reach for their dreams than those who make poor monetary decisions.

It's a concept that Clayton Daniels, assistant vice president of enrollment management at College of Coastal Georgia in Brunswick, says most students don't think about when they are handling their own finances. In fact, he says students don't always take into consideration the consequences of bad financial decisions or actions.

"College costs money and there's aid out there like Hope (scholarship), Pell Grant...and independent loans. But most students aren't always prepared to handle these financial responsibilities because they think it's free money," Daniels said.

"And oftentimes, students make the mistake of filling out a loan, borrowing money above the line (needed), and they don't understand the consequences that come with it. It's an easy trap to fall into," he added.

It's a trap that can last a lifetime.

Taking out federal education loans may be necessary to cover tuition and cost of attendance in places where grants and scholarships may not cover. But for incoming freshmen who never had to deal with their own finances, it can be mind-boggling. What gets students into trouble is when they borrow beyond their needs, said John Cornell, director of marketing and public relations at the college.

"It's like with mortgage. You can take out a loan for $350,000 to purchase a house, but you don't have to use the whole $350,000 to get one. The same goes for students. We are trying to get them to not look at what they qualify for because they can qualify for any loan, but for what they need and to not take it all," Cornell said.

Like Cornell, Daniels says students tend to forget the loans are not free money and must be paid back.

"People think it's just entitlement and to an extent, you are entitled to money for your education, but you're also expected to pay it back," Daniels said.

"The state and federal government are investing because they believe you can make it. And we (at the college) let you in because we want you to succeed.

"There's a tremendous amount of financial competencies that a student has to have. It's not just about paying the money back to the bank (school or government). It's also an obligation to be a productive citizen."

To bypass financial troubles later on in life, Cornell suggests students find out whether they can get any gift aid, which include scholarships and grants that do not have to be paid back.

"It is our job to remove any impediments to make it easy to have access to get your degree," Cornell said.

Next is to borrow only the amount absolutely needed to cover expenses.

"Borrowing for a new car or a flat screen TV may seem like a good idea now, but it won't when you have to pay it back with interest later," Cornell said.

Lastly, students should think about how they will pay back loans before borrowing again, Daniels added.

"We have to show them that there is an end goal to this," Daniels said. "We have to get them to not just think about school in terms of semester-to-semester or year-to-year. College isn't quite that way. We have to get them to look from 30,000 feet and say, 'I can take that loan today but what are the consequences of using it?'"

All education loans must be paid back whether a student finishes school or not and regardless of how hard or easy it is to get a job after graduation.

Failure to repay student loans can hurt an individual's credit rating and cause lots of other financial problems down the road.

Release Date: 10/2/2013
Source: The Brunswick News