Cashing a big, fat reality check

Students learn how to stave off debt before graduating

February 10th, 2010
By Marianne Payne
News Reporter

The Practical Money Skills for Life Program aims to prepare students for life after college. The program kicked-off on Feb. 2 with basic skills such as reading a check stub and job interviewing.

The series of workshops will continue every Tuesday from 5 to 6:30 p.m. until March 9 in PAC F.  Future topics include budgeting, investing, credit, and student loan management. Students are welcome to attend only the workshops that interest them. All workshops are presented by Timothy Welch, financial manager from The Prudential Insurance Company of America.

"The unique thing about financial planning is that there isn't anyone who couldn't use some help," said Welch, adding that financial planning is a vital life skill that isn't always taught in schools. "Usually these are the type of skills that fall to the family." Others learn by doing and through mistakes and adversity.

 “I have to admit I’ve had my difficulties with finances. Everyone has,” said Jeannie Capranica from the Diversity Center, which is co-sponsoring the seminar.

The importance of budgeting is increasingly relevant to college students. Higher cost and a bad economy mean more student loans and at larger amounts.

Students borrowed a total of $75.1 billion in federal student loans in the 2008-09 academic year, a 25 percent jump from the previous year, according to figures released by the U.S. Department of Education.
Closer to home, 66 percent of UIS 2007-08 graduates faced debt that averaged $14,226, according to college-insight.org.

"Unfortunately with increase in tuition and with less increases in grant availability, students are having to resort to loans to cover their education," said Jerry Joseph, financial aid director at UIS.

Confronting the reality of accumulating debt can be difficult for students who are already consumed with their studies.

 “I’ll tell you what is shocking is when you get your first bill,” said Capranica, who was caught unprepared when her student loan bills arrived sooner than expected. Thinking she was safe until six months following graduation, her six-month grace period started ticking down when she downgraded to part-time to finish her thesis.

Students need to plan ahead to avoid a jarring first bill, according to Welch.
"One of the biggest things they can do is to be proactive. Utilize those available resources to see what is coming," said Welch.

The UIS Financial Aid Office is one of those resources available to students.

"We want students to work with us," said Joseph. "The horror stories relate to students getting in touch with us too late, coming to us after the fact when there is really nothing we can do about their situation."

Joseph advises students to prepare a budget plan and minimize borrowing. If borrowing is a necessity, students should keep in mind when the payments start and use the monthly payment calculator available at nslds.ed.gov.

"Don't panic," said Joseph to those students late in confronting impending bills. "Start planning ahead, and if possible, start putting aside money." If payments cannot be met, deferments are easy to get. Students should also be in contact with the servicer of the loan to determine the best repayment option for their situation.

The Practical Money Skills for Life program is co-sponsored by The Diversity Center, Center for First Year Students, Center for Teaching and Learning, Student Life, and Volunteer and Civic Engagement Center.