#2 of our 3 big money mistakes to avoid in college-Not Managing Debt Wisely Between credit cards and student loans, college is a time when many people start using debt on a regular basis. If this debt is abused, it can snowball to more painful problems later in life. On the other hand, if you start managing your debt wisely in college, it builds a good foundation for debt management after graduation. MoneyMagnify provides the following example of a student abusing her first credit card. My mother actually signed me up for my first credit card, says Jeet Singh, a junior majoring in geology. She told me that its only for emergencies, nothing more. But, I figured a few small purchases here and there wouldnt hurt. Unfortunately, those small purchases quickly added up to $7,000, placing a heavy debt burden on Jeet and her mother. Student loans can be worse than credit cards if used incorrectly. Unlike most other types of debt, student loans are not typically dischargeable through bankruptcy. This prolongs the longevity of student debt. Between 2005 and 2013, the total amount of outstanding federal student debt among seniors 65 and older grew from $2.8 billion to $18.2 billion, according to the Government Accountability Office. From 2002 through 2013, the number of individuals whose Social Security benefits were offset to pay student loan debt increased about five-fold from about 31,000 to 155,000. Since 2008, total student loan debt in America has surged by 84 percent to almost $1.2 trillion, according to a recent report from Experian. Student loans are now more popular than home equity loans/lines of credit, credit cards, and automotive loans. Coming up, #3 of our 3 big money mistakes to avoid in college!
Posted on: Fri, 10 Oct 2014 20:00:00 +0000
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