Financial knowledge Essay
Many undergrads enter college looking forward to all of the new experiences they will encounter. However many experience something unexpected. That is the onset of debt due to student loans and credit cards. It is important for college students to understand finances to avoid the overwhelming pressure of debt. Students should educate themselves in finances particularly in the area of student loans, money management, and how to avoid the pitfalls of credit cards.
For the majority of student the only way that paying for college is possible is through student loans. Block (2006) reported that, “Tom Dillon, 19, a pre-pharmacy major at the University of Connecticut, is carrying $52,000 in student loans…When he gets his pharmacy doctorate in four years; he expects his debt to exceed $150,000.” That is a sad truth for many students who do not know there are other funding options for college. Loans are not the sole answer for affording college. There are numerous financial aid opportunities out there.
For example there is the FAFSA, Federal Assistance for Student Aid. This government program is specifically for students to log in their financial need information to be qualified for thousands of dollars worth of grants, scholarships and even loans. Grants and scholarships pay for educational needs like books, supplies, and tuition for the student without recompense. If more students sought after grants and scholarships there would be less of a need for loans.Students are also the target of credit card companies because they know that many of the students are not aware of the specifics of credit cards. This perpetuates the buy today pay tomorrow attitude but in most cases the amount that is charged is paid ten times over due to high interest rates and finance charges. That is why it is important for undergrads and graduates to know how to avoid the pitfalls of credit card debt.Financial knowledge in the area of money management is a must in order to live as a responsible adult.
Students should learn how to live within their means and not buy something just because it is desired when they really can not afford it. Effective budgeting tactics like balancing a checkbook, putting aside a certain amount to save monthly, and planning expenses really do go a long way when financial responsibility is involved.Students are faced with a lot of financial stressors during college. If students educate themselves in the financial areas of loans, credit cards, and money management they will have the financial skills necessary to live life after graduation. That is why it is important for college students to understand finances, to avoid the overwhelming pressure of debt.
Works CitedBlock, S. (2006, Feb 22). Students suffocate under tens of thousands in loans [Electronic version]. USA Today.