Students have several options for financing their educations without entering debtor’s prison upon graduation.
Bills, loans, tuition, jobs: frightening words for young people who know little about the complex world of financial planning. Dealing with banks, the government and employers, and the labyrinth of any post-secondary institution, is a daunting task. It’s hard to know where to start.
Fortunately, there are many options for paying the bills, both at school and at home, before your credit card overheats and stress sets in, overshadowing academic success.
Carla Bodor, a first-year Business Administration student, says she initially felt overwhelmed when she added up the cost of her education.
“It was tough not knowing how much I would be receiving from student loans and where exactly I could and needed to cut my costs,” she says.
To sort everything out she made a trip to the Student Awards and Financial Aid office at Lethbridge College; she recommends other students do the same.
Linda Sprinkle, co-ordinator of Student Awards and Financial Aid, and her team assist with student loans, scholarships and awards, and budgeting. She advises students to get on the right track early and save themselves a lot of stress by erasing any debt they have before beginning their college studies.
“Prior to school, prospective students should do all they can to reduce their debt load (paying off a mortgage is neither likely nor necessary), so that the stress of studies is not compounded by the stress of debt management,” says Sprinkle.
It’s unlikely you’ll be able to get ahead financially while in school full-time, especially while on student loans. But starting your post-secondary career when you’re already behind is a recipe for disaster. Sprinkle advises tackling as many debts as possible before your classes start: expenses will pile up quickly and you don’t want to start your semester already in the red.
As a new student, you can also obtain advice at the start of your first semester. ATB Financial sponsors College Life 101, the new-student orientation event, to outline finance options. Jim Kellington, market manager for the Lethbridge region, says his staff is armed with a wealth of information, including the Students First Plan.
This comprehensive plan offers students a bank account with low fees, a MasterCard and a line of credit. Kellington says ATB staff educate students on the benefits of credit cards and establishing good credit.
Attending college isn’t cheap. Between the money spent on tuition, books, accommodation, food and other supplies, college students often have little flexibility in their budgets. The average cost for tuition, fees and books for Lethbridge College programs in the 2011-2012 academic year is $6,000 and change.
“Oddly enough, tuition, fees, and books and supplies are typically not the major expenditures for many students,” says Sprinkle. “Anyone who cannot live with their parents is going to face considerable expense just living for eight or nine months.”
When Student Awards and Financial Aid staff help students establish a budget, they base the estimated living allowance at $941 a month for a single student with no dependents living away from home. This amount is expected to cover living costs, but many students will have higher expenses, especially if they have vehicle payments. Students on loans are allowed to make additional monthly payments of $800 to help them get by. It is important to remember that start-up living expenses will set you back as well. In the first month, students should factor in damage deposits, and stocking cupboards with essential supplies. Joey Sugai, second-year Communication Arts student, recommends paying bills right away.
“Get the payments you need to make out of the way; that way priorities are being met with your money,” advises Sugai, who is working on his second diploma. If students do not have savings to draw from, or a part-time job, Kellington recommends they obtain a credit card or line of credit to pay for the first month’s expenses. Student loans and other awards, he says, do not arrive in time to pay all of the bills. Lethbridge College also offers advances against student loans to cover some of those start-up costs, for a $5 fee. Students can use credit to cover expenses, and pay off what they owe when funding comes in. He emphasizes the importance of making regular payments on these forms of credit. A good credit rating opens many doors, but a bad credit rating shuts them quickly.
Some students will work part-time jobs while in school, but for many, student loans are the chosen, if intimidating, path. The Student Awards and Financial Aid office is available to help from start to finish. Staff will assist with applications and help sort out any issues that arise once funds have been granted. The office also has information on repayment plans.
“There are plenty of myths around government student loans and we are happy to dispel them,” says Sprinkle. Financial rewards and recognition for hard work can also help pay bills. Countless scholarships and awards are available for applicants, some based on financial need and others on academic achievement. Returning students can apply to the Lethbridge College awards program annually between March 1 and May 1, and new students have until July 15 to complete their award applications. The application is accessible at www.lethbridgecollege.ca/awards. It takes a few minutes to complete and students are directed only to screens that apply to them. The Student Awards and Financial Aid office will assist with any questions. Sugai took full advantage of the scholarship opportunities available. He spent a month applying, with a goal of earning $10,000 in scholarships; he received $9,200. He recommends spending time searching and filling out applications. “Whether the award is national, provincial or local, believe in yourself that you are worthy of receiving it,” says Sugai. Saving money ahead of time is another option for funding post-secondary education; Sprinkle and Kellington recommend an early start. A Registered Education Savings Plan (RESP) is an excellent option, especially when government contributions are included. Your bank will have information on this topic. With so many options out there it’s no wonder students’ heads are spinning before they even step into the classroom. Sprinkle recommends keeping it simple and asking lots of questions. “I often tell people that the key to financial well-being can be captured in five simple words: spend less than you earn,” she says. “That’s not always easy when you’re in school, but the truth is, when anyone is in financial difficulty, regardless of activity, the only real options are to reduce expenditures or increase income.” So, get organized, do your research and know where to go for help. Bodor says she feels things are really coming together now that she has her finances in order and she’s ready to focus on her studies. “I think the biggest challenge is organizing my time between classes, studying, homework and trying to have a little bit of a life outside of college,” she says. “It will be worth it in the end.”
Finances A -Z Apply for awards at Lethbridge College (www.lethbridgecollege.ca/awards). Be attentive and read the communications sent to you by the college and lenders. CanLearn (www.canlearn.ca) – an excellent resource from the Government of Canada about paying for post- secondary education. Don’t ignore statements and bills (bad debt stays on your record for many years and can impact your life significantly). Edulinx’ Exit Counselling – student loan repayment information. Finances are complicated. Contact the Student Awards and Financial Aid office for assistance (403-320-3372). Get out of debt before you start school. ave a backup plan for unexpected expenses. Invest in your education early; start saving as soon as you can. Juggling work and school may impact your grades. Carefully consider the option of working part-time. Keep your address up to date with the college and lenders. Learning Café – offers many avenues of support for college students Make more than you spend. Never leave things to the last minute. Be proactive with your finances. Outline your income and expenses in a monthly budget. P art-time job hunting? Visit The Works – Job and Career Services. Q uestions? Ask someone at the Student Awards and Financial Aid Office. Registered Education Savings Plan (www.smartsaver.org). Students First Plan with ATB Financial (www.atb.com). Take part in College Life 101. Understand the importance of establishing good credit and pay creditors on time. Visit www.alis.alberta.ca for complete information on student loans and other post-secondary education topics. Weigh your options and go the route that works best for you. X financial planning off your list early. You control your future and can learn to manage your finances for success. Zero balance = credit card goal
