Go Ahead - Borrow For College!

I've just finished reading an interesting article on money.com regarding student debt. The authors - two economists - argue that students should ignore all the hype and go ahead and borrow whatever they need for their college education. Overall - I think I have to agree with them - but with an explanation.
As the authors state - numerous studies have shown that college educated workers earn hundreds of thousands of dollars more in their lifetime compared to their non-college counterparts. They are more likely to have health care plans and retirement funds - which is good because they also live longer. So the proof is out there that having a college education pays off in the long run.
Any of you who have read this blog in the past may have the idea that I am totally against the idea of borrowing money for college. I am not naive enough to think that every potential college student is going to be able to save up enough money, or get enough scholarships, to pay for their entire post-secondary education. With the skyrocketing cost of tuition and other college related expenses. it is virtually impossible not to need some sort of outside funding to pay for it all. But this is where being a Money Smart Student comes in.
My advice is to take steps to minimize the amount that needs to be borrowed. I've posted many articles on the subject so I won't get into the details here. There are hundreds of ways students can save money before heading off to school, and spend less money once they get to college. *Shameless Plug* - Just get my book - 'How To Be A Money Smart Student' - and you'll find a multitude of ways to reduce how much money you will need to borrow to make it through to your degree.*End Shameless Plug* There are also numerous websites available - all with the sole purpose of helping new college students survive financially. Some of my favorites are listed over on the right side of this page.
So overall - go ahead and look at what you need to borrow for college. Just do everything you can to keep the student loan debt as low as possible. Cheers!

Student Identity Theft

I have just found a very interesting, and scary, article dealing with the subject of identity theft from children. It seems strangers, and sometimes desperate family members, find children easy identity theft targets because of a lack of financial history. All they need is someone's social security, or social insurance, number and accounts are created and abused.
The reason I think this is something worth posting here is because of the risk to families who may be looking to obtain a student loan in the near future. It appears there have been cases where someone went to apply for a student loan only to find out they have a problem with identity theft.
The article gives some ideas to help reduce the risk and be proactive in protecting a child's financial identity. Better to find out ahead of time if there is a problem.

Student Identity Theft Article

Disturbing Loan Default Facts

A lot of my information here at Money Smart Students deals with how to try and borrow as little money as possible to complete your post-secondary education. The following story in USA Today proves that taking out student loans has the potential to be disastrous to your future credit rating and to your ability to financially handle the major events after college - buying a car, or a home, or even getting married.
The story has some scary facts about the rate of default for loans throughout the United States. It also appears that you have a greater possibility of defaulting on your student loans if you attend a for-profit college. Give the article a read through and keep it in mind the next time you go to apply for a student loan.

USA Today article on Student Loan Defaults

Money on Student's Minds

A new AP-Viacom poll, conducted in association with Stanford University, says money is on the minds of students - a lot. Whether it's the student debt load they are taking on, or how much they'll make when they graduate, students can't escape the fact that money rules their lives.
The poll also confirms that money is the most likely reason a student will drop out of college - not grades.
Average student loan debt tops $23,000 among those surveyed - some reports have it as high as $27,000 - plus another $3-5,000 in credit card debt.
Despite all the money worries, a whopping 85 percent say the effort is worth it in the end when they get a job they love which pays good money.

For a full Associated Press story on the survey, click on the following - Student Money Survey Results

Borrow Only What You Need!

With enough planning and hard work (and time) anyone can put themselves through college without having to take out a student loan. Sometimes, though, there is a need to supplement your education savings through borrowing.
They key is to only borrow what you will NEED to cover your expenses - not what you WANT because there's a great deal on Spring Break trips. In fact, borrow less than what you'll need and keep working and saving to the best of your ability to make up the difference. The more you borrow - the more you will have to pay back. Who wants to be paying off one wild trip to Florida or Mexico 5, or even 10 years later, because you used student loan money to pay for it?
Borrow only what you absolutely have to in order to cover expenses - and you'll be staying on the path of being ready for the real world!