Colleges Withholding Transcripts

The Nation just did an article on colleges withholding transcripts from graduates that are in default with their student loans. Re-read that last sentence. You take out loans to pay for your college education banking on the hope that a person with a college degree will have a better chance of getting a decent paying job and firmly settling into middle-class-hood. Then you graduate and you start looking for a job. The loan folks give you six months to find a job before they start requiring repayment.

The Problem

Imagine you’ve graduated, find a low-paying job, move back in with your parents, and start working. You can’t put gas in your car, give a few dollars to your parents for bills, and pay your student loan. You’re trudging along and then one day to see a job posting for the job of your dreams! You’re a perfect fit and it’ll pay you enough to repay your student loans and maybe move out to a small roommate situation. The company requires a copy of your transcripts so you call your alma mater only to find out that you can’t get a copy of them because you’re in default on your student loans. This could become a huge problem.

Documentaries such as Default: The Student Loan Documentary are showing the problems that students are facing repaying student loans.

Debt bomb?

Yahoo! explains the problem perfectly:

A year ago, the Institute for Higher Education Policy published a study tracking the dismayingly high delinquency and default rates of the class of 2005. But as the sum of outstanding student loans has climbed towards the $1 trillion mark, passing total credit card debt along the way, the fact that America’s students are essentially putting themselves into hock for an education has more than a few people panicking. As William Brewer, head of the National Association of Consumer Bankruptcy Attorneys, told the WaPo, “This could very well be the next debt bomb for the U.S. economy.”

Suggestions

I have no answers other than the traditionally held:

#1 Attend a community college to complete your lower division classes.

#2 Choose a college with good return on investment (ROI).

#3 Get as many grants and scholarships as you can.

#4 If you have to take out loans, only take what you need. You can deny portions of your loan package.

#5 Start paying the loan off while you’re in school. Interest is a beast.

What suggestions do you have for dealing with paying for college?

Shay Olivarria is the most dynamic financial education speaker working today. She speaks at high schools, colleges, and companies across the country. She has written three books on personal finance, including Amazon Best Seller “Money Matters: The Get It Done in 1 Minute Workbook”. Shay has been quoted on Bankrate.com, FoxBusiness.com, and The Credit Union Times, among others. To schedule Shay to speak at your event visit www.BiggerThanYourBlock.com.

Save Money on College Costs

As it gets closer to the May/June season of graduations it’s time for many to think about college costs.

Even if you don’t think you will be awarded any income based grants, you should apply for aid using the FAFSA application just in case. It’s free to apply.

Remember to check that you want to have Work-Study grants on the FAFSA application. Work-Study grants allow for students have part-time jobs on campus. They are a great way to gain work experience and a decent wage.

Apply for grants from the school you’ll be attending as well as general grant clearinghouses such as Fast Web. Site should not charge you to have access to grant information.

Consider local, in-state schools as well as out-of-state schools. There are some very good bargains to be had in education. Don’t fall for the hype. Almost all undergrad degrees are equal. Going to a school with a great general reputation doesn’t mean that your major has a great department or that you’ll be offered a job automatically after graduation. Find a school that has a great department in your major and has great connections to jobs, research, etc.

Buy used textbooks. There is no reason to pay full price for textbooks. When you get on campus you’ll see notices from other students wanting to sell their old textbooks. Buying from other students is a great way to buy book cheaply. Another way to buy used textbooks is to visit the college bookstore or buy online.

Take out loans only as a last resort. Many students get stuck in student loan ruts.

Lastly, there are college and universities that will provide enough grants to make your college experience free! I found this list of 10 schools that will provide you with a great education and expect no payment.

For those that aren’t going off to college just yet, remember that high school students can:

– Take advance placement classes that will provide the student with college credit. Placement classes are available at high schools. Students sign up for these classes with their high school counselors. They are a great way to prepare students for the rigor of college coursework and shave a few dollars off of college costs.
– Take college courses at a community college while still in high school. Many students have done so well in their high school careers that by senior year they don’t plan on taking too many challenging classes. This is folly. Taking even two classes at a community college each semester over senior year, including summer, will knock off paying for a whole semester of college costs.

Default: The Student Loan Documentary

I’m so pleased to tell you that the makers of Default: The Student Loan Documentary have partnered with Bigger Than Your Block to include the trailer for Default in all copies of my second book, 10 Things Students Need to Know About Money.

As you know, my work educating folks about how important personal finance is includes college costs as well. Right now paying for college is one of the biggest challenges many families have. Traditionally, taking out loans has been the way many college students have bridged the gap between costs and available funds. While loans are not bad in and of themselves, many students weren’t sure of what they were getting themselves into and found themselves with a mountain of debt. Default: The Student Loan Documentary will help families better understand loan products. I’m proud that this informational documentary trailer will be available with 10 Things College Students Need to Know About Money.

Default – The Student Loan Documentary Needs Your Help!

We totally support the making of this documentary and right now they need our help.

From Default’s Facebook:
“Default: the Student Loan Documentary is competing to win $10,000 on www.ideablob.com
In order to qualify for the monthly showdown, we have to win one weekly sprint. We have decided to compete from July 8th to July 14th. If we get more votes than any other ideas during that week, our votes get reset to 0 and everybody will have to vote again for us to win at the end of the month. Please vote now.”

To hear the full interview with Aurora Meneghello click here.