Sorry for the delay. My computer crashed after my last post. Still trying to get it fixed! I had to borrow my daughter's laptop.
Anyway, I read an article in U.S. News by an author who claimed middle- to lower-income students don't know how to manage money. The author perfomed research at an unnamed college for her doctoral dissertation. She found that low-income, first generation students did not know how to manage their money. I disagree. Being in the financial aid field as long as I have, it's not limited to low-income students.
I have yet to drive or walk to work without seeing a cell phone stuck to someone's ear or fingertips. I see students in Best Buy walking out with big screen HDTVs. My college daughter has a WII. Students in this era have grown up with major technology, single bedrooms, and access to what they feel is needed to survive. But what is really needed? What comes to my mind is food, shelter, clothing. The debt that students are accruing with student loans is staggering. I'm willing to bet that not all financial aid is being spent on educational expenses. The other day I spoke to a student on the phone who was asking for more loan money because she wanted to buy school clothes for her three children. I had to explain that federal financial aid can only cover educational expenses related to the student. I have also counseled a number of students coming right from high school who want maximum loans to cover major credit card debt.
Many students think having a fully furnished home, including all the major electronics, and a new car is a necessity. It's not. You're in college. And I'm not talking only about the traditional 18-year old. Older non-traditional students are just as bad. For example, borrowing money now to buy a nice car may seem ideal, but think about that car you probably no longer have when you're repaying your loans 10 years from now.
Students may know how to swipe a piece of plastic or write a check, but most do not know how to budget money. I agree with the U.S. News author that a course in financial management and budgeting should be mandatory for all students in their first year of college. Students who run into money problems usually work more hours, go hungry, fail to buy necessary school supplies, or completely drop out of school. It doesn't have to be that way. These actions will ultimately affect college performance and subsequent employment.
Remember, financial aid is to cover costs directly related to educational expenses. I'm not trying to harp. I just want students to realize that managing money and borrowing as little as possible will be a huge benefit in the long run. So, I'm giving you an independent study assignment: do a Google search for articles on money management or budgeting. Read it/them thoroughly. Then sit down and create your own budget. You might be surprised to find you can cut some spending and have more for college. Budget for the future and what you expect to have after graduation. Then, go to finaid.org and complete the loan calculator for the loan balance you expect to have after graduation. See if you're close to your expectations.