Blog # 11 Effectively Financing College

Effectively Financing College

A key to successful financial planning for a student is to learn how to build a financial plan for education, avoid serious debt, and use credit wisely.

.           Students need a living budget. The money that students use for their education often is found from sources other than their parents’ pockets. Billions of dollars of financial aid are awarded each year. Are you the one to get the award?

ARCC students

Many students have quite big dreams when they first start college. However, in goal setting for students, big goals are too hard to reach. It should be divided into short term goals. Patience will be good for person. In this case, students must learn how to make small steps first. It is better than taking a big leap.

Moreover, college student has more to be concerned with than just getting good grades. Graduation is not the end of life. Financial situation is a major concern. Because most college students are using loans to finance their college education, the debt level of recent graduates is raising rapidly. A recent study by the National Center for Education Statistics showed that the average student loan debt is $10,000. The average cost of college increases is twice the rate of inflation. The College Board estimates that public school costs are about $13,000 a year for public and $28,000 per year for private school and another $2,000 in credit card debt.   

There are many kind of financial aid at college. Scholarships and grants are the best money source for college because it is money that doesn’t have to be repaid.

Scholarships can be competitive, and even the grades made early in high school years can mean the difference in winning or losing. Student loans are not free money; they also default on credit history. Student loans are almost impossible to discharge in bankruptcy. Of roughly 72,000 borrowers in bankruptcy in 2008, only 29 students or 0.04% had all or part of their federal student loans discharged.

Joan Karow, an officer at Anoka County Communication Action Program, said, “Student should ask themselves when they see something they really want to buy is: Is this something I WANT or is this something I NEED?   Also, just because something is on sale and it is such a good deal you have to buy it, if you didn’t need it, you really didn’t save anything.” 

Avoiding excessive spending is good thing to do. Aleisha Baragar, a freshman at Anoka-Ramsey Community College’s student, said, “My suggestions are to plan a strict budget and stick with it.  Try to avoid all serious unnecessary debts and save for emergencies because the unexpected will happen and it will be much easier and less stressful if you are prepared for it.”

Baragar who has one son and is injured from ski accident two months ago, said, “My current Major is Nursing Prep, and I plan on entering the nursing programing, but I may change my major and get a degree in Psychology. My dream when I finish college is to be able to find a career that I enjoy and relocate to a warmer climate.”

“I do use financial aid to pay for school and supplement my income. With financial aid available it makes paying for school less difficult but student loans do only stretch so far to help cover living costs while attending school,” Baragar added.

Ben Blanchette

Ben Blanchette, a full time student, said “There are very few things in this life worth going into debt over.  School and home mortgage are the only two I can think of.  Maybe, it is a car too.  Buy things that are made to last, and take care of them.  Build credit.  Monitor the cre

Blanchette was born in St. Paul, Minn. He chose ARCC because of proximity to his house and lower costs. He is completing the Minnesota Transfer Curriculum, with a possibility of an Associate in Liberal Arts degree at ARCC. He takes only the subsidized federal loans. He applied for scholarships, but he did not receive any scholarship awards.

Blanchette has his dream, but it is hard to be a successful person. He would like to make a decent living ethically contributing to society.  “This takes effort.  If it were easy everyone would be doing it.  I believe people will get out what they put in.” Blanchette added.

Blanchette said that some people who have a lot of money because they have good ideas and run with them. Others are able to play investments properly. Others carefully build on what they have.

Chelsie Webb, a second year at ARCC, said, “When I finish here with my Associates in Liberal Arts, I plan on transferring to the University of Minnesota to study History as my major. Financial Aid almost always covers my ARCC expenses - including books. Otherwise I work at a part time job.”

Webb advises student to avoid credit cards if they can't pay them off every single month. “If you fall into the trap of interest-debt, it makes it almost impossible to get out of it. Plus, it's very stressful. If I could, I would live strictly on a cash budget.” Webb said.

“I learn everything from my mistakes, but every day I will get up fresh and go to work and try something new again and again till it is right,” Supenn Harrison, an businessman in Minneapolis, Minn.

“We must try to manage our money, but watching your income and expenses, the ratio of the income, must be bigger than expenses, if the ratio is tilled one way or the other, then we must adjust it,” Harrison added.

Students who graduate with excessive debt or who default on their loans are more likely to be depressed. Few students understand how to go into debt the “right” way and how to get out of debt.

To avoid debt on a credit card, charge only what the budget will allow person to pay-off monthly.  Otherwise, extra finance charges can add up very quickly.  Unfortunately, credit cards are necessary to establish a credit score on one's credit report.  If used improperly they can quickly have an adverse effect on that person's credit score. 

A student who wants to be a successful financial person needs to have a monthly spending plan. A Student needs to prepare for immediate goals, short-term goals and long-tern goals.

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Start Early and Get Advice

Financial Aid Advisors

              The Financial Aid process can be complicated at times. Financial Aid advisors at Anoka-Ramsey Community College are available to assist students with basic financial aid management on Monday through Saturday.

            Financial Aid advisors are to assist students apply for financial aid (including FAFSA workshops), understand financial aid awards, how to apply for loans and the different loan options and how their financial aid is applied to their ARCC tuition or fee charges.  Students receiving financial aid who are

thinking about withdrawing or dropping a class or classes should visit with a Financial Aid advisor to determine how this may affect their financial aid.

 Financial Aid is awarded to students to help with their “educational expenses”.  Educational expenses do include tuition/fees, books/supplies, transportation expenses and basic living needs. Financial Aid is generally paid out to students once per term. Students need to manage their financial aid disbursement throughout the semester.  

Karla Seymour, a director or Financial Aid, said if students have questions, they are highly encouraged students to contact the Financial Aid department for assistance. 

            “Students who change majors or withdraw/drop credits may have a financial aid impact. Students again should contact the Financial Aid Department for assistance.  Also, know ARCC Financial Aid policies are important.  Pick up a student handbook and visit the ARCC web for detailed information,” Seymour added.

            Seymour said that Financial Aid advisors would encourage all students to apply for financial aid.  This truly is the only way to determine what the student is eligible to receive and it doesn’t commit the student to any loans they don’t wish to accept.

“Many times a student may not think they are eligible for aid but after completing the financial aid application, many are surprised by the amount of aid they receive.  Don’t assume you’re not eligible. Take the time to complete and submit the FAFSA,” Seymour said.

 

 Borrowing is a conservative issue.  Because loan funds have to be re-paid and with interest, students should borrow only what they truly need.  It does add up quickly, and students can find themselves in high loan debt.  Also, student loans are better than going to a bank for a personal loan (better repayment options and typically interest rate). 

Students should keep finances in good shape and avoid debt. Education beyond high school is a big investment of time, money and effort. Students will need to figure out how to pay for their education, but all the effort students put into it will be worth it.

However, college is a time of new found freedom for many students. New students must learn to manage college life while balancing their outside life. If students feel stress in classes or from financial crisis, there are a lot of activities outside classroom at ARCC.

Cindy Nutter, Dean of Student life, said, “Participating in Student Life activities provides knowledge “outside the classroom”, provides opportunities to develop leadership skills and provides a wide variety of opportunities for fun and relaxation. “

There are many ways student life can help ease stressful situations.  They range from coming to a student life area, such as the student activities areas have a beverage, sit in a comfy chair, watch television, play a game of pool, visit with other students, etc.

“Students can join something that allows them to be creative, i.e. the school newspaper, art club, choir, or a school play,” Nutter said.

 Students can relieve stress by physical activity such as joining a college sport team, playing intramural sports, and working out in the weight room or using the open gym time.  It is the best way to save money and have fun with friends.