Georgia Perimeter College Newsroom

How are you going to pay for college?

by Leila Lawlor

Covington News, March 14, 2014

Why do we hear horror stories about college students graduating with tens of thousands of dollars of debt and without good job prospects? And what can college students and their parents do to avoid falling into that debt trap? The answer is financial literacy — education geared at successfully handling one’s finances and making wise decisions.

This is the time of year when college seniors receive acceptance letters and decide where to attend college. Many factors are involved in this important decision, but for the majority of families the most important factor is affordability. …

Mary Johnson, who is a financial literacy expert at Higher One, Inc. and a former associate commissioner for the Connecticut Department of Higher Education, shared invaluable information with me about how to choose the correct college, how to pay for it, and how to avoid unmanageable debt. She offered this advice for high school seniors:

• Families should sit down together and discuss expectations of who will pay for what. A family emergency or an unforeseen financial difficulty like major car trouble could dash your dreams of a college degree.

• Students should carefully evaluate their financial aid packages before selecting a college. Student should know that they do not need to accept all the loan money that is offered to them. For example, if they are offered $3,000 a month for housing and other living expenses, they might be able to live on far less, thus entering into much less debt during college.

• Debit cards are often better ideas than credit cards for students. If you must enter into credit-card agreements, be careful about debt that can mount quickly with high interest rates. Keep your balance low and inform the credit card company you do not want your credit limit raised.

• Know what your required loan payment will be after graduation and compare this amount to what you can expect to earn with your college degree. The benchmark figure of manageable debt is 10 percent—a person’s debt, excluding a mortgage, should not exceed 10 percent of his/her income.

• Is a pricey college worth the investment? It may depend on a student’s career aspirations. During the first two years of college every college student must complete general education requirements. These courses are pretty much the same regardless of the school, so there is little reason to pay big bucks for college during the first two years, she says. Johnson especially likes the idea of a student starting out at a two-year college like the one where I teach, Georgia Perimeter College.

• Two-year colleges are generally very affordable choices, and at under $85 a credit hour, Georgia Perimeter College is a great value.

Read full story at http://www.covnews.com/section/12/article/50680/