The Essentials of Paying for College

When students transition from high school to college, they start to take on more of the trappings of adult life. They’ll be able to get up when they want, go to class when they want and eat pizza and mac and cheese for every meal, if they really want. But students in college are also expected to manage money like an adult, and to make good decisions that could help them succeed in the future. Unfortunately, when it comes to properly managing college finances, some students are far behind the curve.

Understand the Issue


A 2011 study by Charles Schwab (as reported by U.S. News and World Report) suggests that the majority of high school students want to learn more about money management, so they can track their expenses more effectively.

Unfortunately, it seems that few students get this kind of education, as many of them experience financial difficulties during their time in school and in the years that follow.

14.7 percent of students with educational debt defaulted on their student loans within the first 3 years of repayment. Source: U.S. Education Department, as reported by Bloomberg.

Teaching Skills

Students want to learn, and they certainly need to learn, so wouldn’t it be reasonable to expect their high schools to pick up the slack and promote financial literacy? In a perfect world, that’d be true, but unfortunately, few institutions offer, or are able to offer, that sort of education.

Just because parents might not feel up to the task of providing the lessons students need doesn’t mean that students are doomed to financial failure. In fact, there are a number of things students can do in order to get the skills and answers they need.

Portrait of two male students using laptop while having coffee a

By letting apps lead the way, students may gain control over their expenses and learn more about money management in the future. But there are also some low-tech options available.

A system like this keeps students from overspending, and it can result in savings. For example, The Washington Post suggests that businesses are allowed to charge a 4 percent fee on credit card transactions.

Students can also control their finances by looking for ways in which to scrimp and save. Shopping at thrift stores, eating in instead of paying for restaurants and biking instead of driving can all help to make life less expensive. There’s no shame in taking these steps either, as survey data reported by AOL suggests that surprisingly wealthy people take steps some might consider thrifty. If you live beneath your financial means, you will only see your net worth grow. Also, shoppers with college degrees are more likely to use coupons.

Stats on who uses coupons

Coupon QR code on smart phone

Good Goals

Chipping away at expenses, creating a budget and utilizing financial planning software can be vital steps for some students, but there are other goals all students should keep in mind as they plan for their financial future.

Staying in school sometimes means borrowing more money, and sometimes students have to borrow at high interest rates in order to get the funds they need. Getting a loan from a private source isn’t bad, as private loans can provide necessary funding when federal and institutional aid are not available, but in any situation a student should carefully research their loan options.

Finally, students should be sure to watch their accounts closely, and be wary of funds or penalty fees. Overdraft charges, in particular, can take a huge bite out of a student’s budget. Although the median overdraft fee charged is $34, the average account that had at least one overdraft charge typically averages $225 in fees per year.

Students who continually rack up charges, or who are considering taking out high-interest loans in order to stay in school, should visit their school’s financial aid office. Financial aid advisors can help students parse through the maze of financial aid options, hopefully making the process of paying for college both easier and more affordable.

Paying for college is intimidating. We all know that an education isn’t cheap, no matter what school you go to. But there are a wide variety of resources that can help you make sense of the paying for college process, and even save money on the total cost of college. All it takes is some research and diligence, and we’re here to help.

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