Credit and DebtHere are some scary statistics:
I don’t let you know these statistics to encourage you not to borrow money for college or not to charge purchases on credit cards. I mention them to illustrate how common debt is already, and how it can easily get out of hand while a student is in college – both from credit card debt and student loan perspectives. Student loans are a good thing, and I encourage everyone to make use of them if necessary as a method of paying for college. I just don’t want your college debt to get out of hand. If anything, the current financial crisis has taught us that lenders will lend us more money than we can really afford to repay. That places more responsibility on each student (and her/his family) to decide how much they can/should borrow, and stick to it. Don’t pay attention to what anyone else is doing in this regard. And don’t borrow more than you need just because your financial aid award will let you. A $400 I-Phone financed through a college loan will probably take over 10 years (a typical length of time for student loan repayment) to repay and will actually cost almost $510. And the I-Phone will be obsolete before you even graduate and start paying for it… There is both irresponsible borrowing and lending going on today. Colleges are beginning to address excessive borrowing on the part of students with outreach efforts aimed at reducing debt. When money is tight, it becomes even more important to create, use, and stick to a budget. Credit cards –
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