Tag Archives: student loans

High School Students Can’t Make Financial Decisions About College

At the beginning of my senior year of high school, we had to fill out a questionnaire for the college adviser. It asked if I wanted to stay close to home or if I wanted to move to the opposite coast, what my interests were, what strengths and weaknesses I had, and o yeah, if finances were going to factor into my decision about where to go to college.

Maryland Terrapin
University of Maryland by enygma

Like many high school seniors, I said that finances were not going to be a major part of the decision making process.

My College Decision Making Process

This is what my decision making process looked like while I was filling out that questionnaire:

  • My parents had provided for all my education expenses up until that point
  • I had some money saved up for college
  • It was more important to go to a good school than to worry about how much it would cost

I had no idea how much my parents had set aside for me, and I had absolutely no concept of money at the time. So why should I care how much college is going to cost?

The Problem With Letting High School Students Make Financial Decisions

At age 17, the difference between $25,000 in student loan debt and $100,000 in student loan debt is really small. Many teenagers look at the options like this:

  • In either case, it’s a lot of money that will get paid back eventually.
  • With a college education, it won’t take long after graduating to start paying it off.
  • Every else goes through the same thing, so I am not any different.

Why are these kids being put in charge of a potentially life-changing decision without being given all the tools to make the best choice?

How High School Students Decide Where To Go To College

Most high school students think more about the social and academic aspects of college than the financial aspects. Some schools are better when it comes to specific disciplines and for the most part, kids are looking at what their lives will be like during college instead of thinking about what their lives will be like after it.

I went off to the University of Maryland (Go Terps!), and at some point during my junior year, my father told me how much debt I was probably going to graduate with. OK, it was a fact of life that I was going to have to deal with. If he had said $70,000, my reaction would have been the same.

Parents Need To Help Make The Decisions

I’m glad my parents were looking out for me and didn’t allow me to take on more than a reasonable amount of student loan debt. I had absolutely no idea what I was doing, and if there hadn’t been any money set aside for my college education, I am confident that I still would have decided to go to the University of Maryland. I consider myself very fortunate that I had help during the entire process.

It’s not fair to make high school students decide between two enormous amount of debt. Parents need to be extremely involved and not only lay out the realities of what life after school will be like, but guide their children because they are much better suited to look at the whole picture.

How much student loan debt did you have when leaving college? As a high school senior, were you able to make an informed financial decision about where to go to school?

Do You Pay Student Loans Bills With a Credit Card?

I love using my credit card for gas (3% cash back) when I can, but there are certain situations where you simply can’t use a credit card to pay your bills. I would love to get 1% cash back on my rent, but of course the property management company I rent through ads on lots of fees if you pay via credit card, so I send in a check each month.

Now that Lauren and I are married, I’ve taken a look at our financial situation and wanted to take action on a couple of important matters.

The first was paying off some of her student loans. I’ve paid off most of mine, but we can’t say the same for her (yet).There are a lot of them, and while the large number is a little scary, I’m not expecting to pay them all off this year. That being said, I want to tackle the high interest rate loans as soon as possible. At 7.25%, I’d love to lock in that rate (I look at paying off debt the same as earning that interest rate) for the foreseeable future.

The only question was how to pay it off. I love doing things online because it’s super fast and convenient, but I’ve had trouble in the past with paying off student loans online because by default, the payments are applied to all loans (both principal and interest) instead of paying off just the principal of the loan I wanted. I wanted to save money on the student loans, I didn’t want to make payments on the loans with lower interest rates!

So we called in together to find out how we could pay just the expensive loan, and were surprised to hear that we could pay it off over the phone, using our credit card. Um, score! I was planning on paying off $7,000, and to know that I’d be getting 1% back means I got $70 for paying via my credit card (which never carries a balance from month-to-month).

Readers, Does your student loan company let you pay via your credit card? Does this encourage you to pay off your balance sooner?

Paying For College

In addition to help from my parents, I took out unsubsidized student loans and private loans to help cover the cost of tuition. I left college with about $25,000 in student loan debt, a little more than the average. In the 2 years since I graduated, I’ve paid off all the high interest debt and have about $9,000 left on a variable 2.25% loan, which I’m happy to pay off a little less aggressively.

I’ve done several posts about student loan repayment options, but I want to hear from you. What tips do you have for keeping costs low? One of the most important things you can do is keep current with payments and if possible, make payments during school! It may mean getting a part-time job, but the difference will be huge once you graduate and you will be grateful to have a big chunk of that debt missing!