Costs are high, money is tight, and mastering financial basics is essential for student survival
Edmond, Oklahoma (PRWEB) September 5, 2008
Preparing for college is about much more than class schedules and books: often more time is spent in financial aid offices than in tutoring sessions. According to BankingQuestions.com and its new feature section "Off to School: Financial Survival 101," many of the financial aid and money hassles can be avoided with careful planning and some basic knowledge. "Costs are high, money is tight, and mastering financial basics is essential for student survival," says Mary Beth Guard, Executive Editor of BankingQuestions.com. To help students and parents make the most of their money, BankingQuestions.com offers the following tips.
Know Your Financial Aid Options
A variety of options exist to help students and parents finance college. Ultimately, parents need to help their students assess which options are the most cost effective overall, taking into account not just the interest rate but the repayment options, the origination fees, and the potential for loan forgiveness. The first step in determining which financial aid options may be the most cost effective is to understand the variety of options available to the student.
Although the school's financial aid office offers an award letter explaining which loans or grants a student qualifies for, parents and students may need to look beyond the award letter from the school to determine the number of financial aid options available to them. Many scholarships, grants, and loan options exist to help finance a student's education. For a more thorough discussion of the FAFSA and the cost of education, check out http://www.bankingquestions.com/studentloans/q_costofattendance.html.
Understand Freshmen Living Requirements
Freshmen are often required to live on campus. Deciding where a student will live is an important part of the student budget. If students live on campus, they usually must also purchase a meal plan. Talk to the school beforehand to learn if the school has such a requirement. The cost for dorm rooms and meal plans can often be expensive, and unlike buying groceries, there is no potential for trimming down the cost. However, most schools allow students to live with parents during the first years instead of living on campus. If students are suffering from a money crunch, living with family may be the ideal solution. When considering housing costs, students and parents need to remember to check the school's housing policy and budget accordingly.
Determine a Budget
Parents and students should establish two budgets before starting school. The first budget should focus on how much the student needs to live during the course of the semester. The student also needs to keep a second budget in mind: the one the student should realistically have after graduation. Without some thought to the future, students may graduate and owe more in student loans than their annual salary. Students and parents need to be vigilant in making sure the student will be able to meet student loan payments after graduation. For help making out a budget, look at http://www.bankingquestions.com/manageyourmoney/q_buildbudget.html.
Understand Bank Fees
Students will undoubtedly need a checking account where he or she can deposit student loan refunds, to pay bills, and to receive money from parents. Students and parents need to establish early on whether a student should receive a debit or credit card. Although it is a good time to start building credit, students may choose not to use a credit or debit card because of the inherent danger of overspending or becoming overdrawn. Students also need to keep in mind that poor payment history will be reflected on their credit report and may affect their ability to get credit later in life.
Regardless of whether a student uses a debit or credit card, everyone needs to understand the penalties associated with the account. Students and parents need to understand up front the cost of mismanagement and decide if credit cards or debit cards are appropriate for the student's situation. Also, if a mismanagement of funds occurs, the student and parents need to understand who will be responsible for the bill. For more information on the dangers of student credit cards, check out the credit and debit card section on "Back to School: Financial Survival 101" and articles about student credit card recruitment on campus at http://www.bankingquestions.com/studentloans/a_student_credcards.html.
For more free information about student loan options or helping students prepare to go to school, visit BankQuestions.com. The website features a new section entitled "Off to School: Financial Survival 101," and offers articles, Q&A's, and discussions on a wide variety of financial matters concerning students at http://www.bankingquestions.com/backtoschool/backtoschool.html.
BankingQuestions.com offers unbiased, free, expert answers to financial questions through interactive question and answer forums along with podcasts, blogs, videos, and links to banking regulations. For more information, visit http://www.bankingquestions.com.
Mary Beth Guard