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Health & Fitness

For a Bright Financial Future after College, CCCS of MD & DE Recommends, "Find Ways to Borrow Less"

CCCS of MD & DE financial expert Nina Heck offers tips on how to avoid borrowing too much for college. She shares her own experiences with her daughter Heather and provides ideas on how to afford school without taking out large student loans.

Did you know Americans now owe more in student loan debt than we do on credit cards?  And before long, educational financing may cost us even more thanks to recent federal legislation, which ties the interest rate on government-backed student loans to the yield on 10-year Treasury notes.  Financial expert Nina Heck says these issues strongly affect students and parents who are looking for a way to afford college.  She cautions, “College debt can lead to big problems once you graduate, if you don’t find a job immediately or have to settle for work that doesn’t pay well. To avoid this situation, consider all the options and only borrow as a last resort.” 

Nina, who serves as the Director of Counseling and Client Management at local nonprofit Consumer Credit Counseling Service of Maryland and Delaware (CCCS), regularly counsels college graduates and parents who are dealing with student loan debt.  She also knows the financial challenges students face firsthand, having helped her two daughters, Ashleigh and Heather, complete their undergraduate educations.  Heather, who received a Bachelor’s degree in Interdisciplinary Studies from the University of Baltimore this past spring, admits having a “financially savvy” mother was helpful.  “She encouraged me to fill out the FAFSA application each year in the hopes of getting grants and scholarships, so I wouldn’t owe too much on student loans.  We worked together to figure out what expenses I’d have and how to cover them.  We also stayed in close contact once I left for school.  We regularly discussed how much I had to spend and how it could be used.” 

Nina believes open communication is important for students and families who hope to limit their educational debt.  “Parents need to sit down with their children and talk through financial realities before they ever leave home.  Be honest:  How much can you all afford to spend on college?  Also think about your particular child.  What may work for one student, may not work for another.” 

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At the start of Heather’s undergraduate work, she and Nina looked at colleges together, initially settling on Highpoint University.  Heather says, “At first I was really looking for a school that had a good teacher-to-student ratio and the right mix of courses.  Highpoint seemed to meet these expectations.”  But after attending two years at Highpoint, Heather realized if she continued there, at graduation she’d be saddled with a hefty debt.  After some soul searching and discussion with her parents, she decided to move back home and attend a local college to cuts costs.  She transferred to Harford Community College for a semester and completed her education at University of Baltimore. 

Based on this experience, what’s her advice to college bound students?  “Start at a community college and stay there your first two years.  That way, you can easily transfer to a state university as long as you have a 3.0 grade average.  Believe it or not, any school in Maryland is far enough away from home.”     

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Throughout her undergraduate career, Heather continued to talk and plan with her family.  “I stayed in touch with my parents and I regularly went online to check my bank account or called for my balance so I knew exactly how much I could afford to spend.  Before I applied for a credit card, my mom also gave me some good advice:  She said, ‘Only use it for emergencies, so you can build a good credit history,’ and that’s pretty much what I did.  I avoided impulse buys and only used it to cover things like car repairs and textbooks.  I also paid my credit card bill on time and paid off as much of the balance as I could each month.”

Although Heather used her money wisely, she still ran into financial challenges at school. “Parking was a major expense when I attended University of Baltimore,” she admits.  “I wanted to be as safe as possible and I didn’t want my car scraped up, so I didn’t park on the street.  But that meant paying to park in a garage.  Even though I got a student discount, it still cost $5 a day, and on a student budget, that was really tough!”  

Heather brainstormed with her mom to reduce this expense. The solution they found?  “I arranged my schedule so I was taking the same course load but attending classes fewer days a week.  That meant spending a longer time on campus some days or sitting through three-hour, once-a-week classes, but it saved a lot on parking costs.”

Heather waitressed part-time to cover her living expenses while attending University of Baltimore.  This left her with less debt when she graduated and provided her with skills that came in handy later on.  When graduation time arrived, she and Nina pulled out the big box where they had stored all her student loan documents.  Nina says, “We totaled up what she owed, when each loan would come due, and talked about the best way to pay them off.”

Then with her diploma in hand, Heather began to look for a job.  “When I first got out of school, I took some time and tried to pinpoint what I wanted to do. Given my major, I thought the government sector was the logical place to start searching for work. But there weren’t many jobs available there, and those that were, didn’t pay enough to cover the cost of living and my student loans.  Then I spoke with a contact who asked me, ‘What are your talents?  What do you love to do in your spare time?  Think about that, and you’ll know the type of job that’s a good fit for you.’ That advice made sense.  When a job opening came up for an event planner where I work, I thought, ‘Why not?’  I love cooking and working with people.”  Heather got this job and has been working full-time ever since.  “It’s demanding, the hours are long, but I love the activity and I’m learning so much.” 

Nina says that Heather’s job search holds a lesson for parents with new graduates living at home.  “As a parent, you don’t have to have all the answers, because there are a wealth of resources out there.  College grads should take full advantage of the career placement services at their schools.  Professors and internship contacts may offer valuable advice.  People within the community or at work may even have helpful ideas.  Encourage your child to be proactive. Employers don’t come to you and jobs don’t materialize if you just sit at home.”

She also has advice for parents and young adults who are worried they have taken on too much college-related debt:  “Seek immediate help.  The sooner you deal with your problem, the sooner you’ll have a solution.  At CCCS, we offer free, confidential budget and credit counseling.  We can help you set up a budget, find ways to reduce your expenses and increase your income.  We can even help you come up with a plan to repay student loans.” 

How have things changed since Heather graduated and got a job?  “I’m not poor anymore!” she jokes. Nina is happy and proud of her daughter’s success. “Going through college, we didn’t always have a lot of money, but maybe that’s good, because she learned how to save.  My hope is that the many budgets we’ve prepared together will help her continue to make wise spending decisions once she’s living on her own.”

Call 1-800-642-2227 to schedule a budget or credit counseling appointment with CCCS of MD & DE or visit www.cccs-inc.org to learn more.  The agency’s counselors are all certified.  Clients receive advice at local offices and by phone. 

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Consumer Credit Counseling Service of MD & DE, Inc. (CCCS) is an accredited 501(c)(3) nonprofit agency that helps stabilize communities by creating hope and promoting economic self-sufficiency to individuals and families through financial education and counseling.  CCCS MD State License #14-01 

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