College is a time of learning, in both academics and real life. Fully grown adults often report “finding themselves” when they were attending college or at least college-aged. Unfortunately, university students’ brains are not fully developed, tending to make worse decisions than their fully-grown counterparts. Taking on excessive amounts of debt in college may seem acceptable, as nobody will throw you in the slammer – chink! – for failure to pay debts. However, not fulfilling these obligations can negatively impact credit score in the interim and the future.
Many other negative consequences are birthed as a result of stupid decisions made when younger, piggybacking along on their older selves’ lives. Debt is one of the most common problems incurred herein. Below are six kinds of common money malfunctions that plague adults from the college years onwards.
1. Getting in trouble in school may have lasting financial consequences
Young adults are undeniably riskier than those who are fully grown, or at least older. Getting caught cheating in class, drinking on campus, or using drugs in one’s dorm room may have lasting consequences. Graduates seeking to get in postsecondary healthcare programs or competitive graduate schools may not gain entry due to institutional actions taken against students in their young, dumb freshman years, even. Having to wait longer to get into these programs, or even getting in, at all, foregoes boosted salary that could have been earned sooner in careers.
Some prospective graduate students that fail to get into programs of choice may settle for programs that are less selective, subsequently resulting in lower career pay or fewer opportunities. If those prospective postsecondary students do gain acceptance into a program, they are also less likely to earn scholarships, further boosting downwards their potential.
2. Taking on mounds of credit card debt
Credit cards are often marketed towards younger age groups, as young adults generally have less disposable income and — you guessed it — low risk aversion. As such, college students may be tempted to take out credit cards to cover expenses, purchase books, and use instead of lower-interest student loans.
Having many credit cards in one’s rotation reflects negatively on credit reports. Similarly, holding high balances on those cards, collectively, lowers credit scores significantly. Credit cards often result in debt unreasonable to be paid off, carrying excessively high interest rates. Virtually the only options former college students who made this mistake are A. pay it back, B. pay it back, or C. pay it back!
3. Living off student loans, rather than earned wages
Some students are fortunate to receive trust funds, inheritances, and stipends from financially stable parents and family members. These lucky college students are able to forego working, resulting in more free time to spend studying and less stress as a result. However, expending interest-bearing student loans in place of disposable income is absolutely unnecessary for maintaining proper financial health.
4. Attending a university more expensive than necessary
Various programs differ in tuition for several reasons. Sometimes, programs with higher tuitions than others don’t necessary offer better-quality educations or career prospects to their graduates. As such, seeking out secondary schools that grant students a low financial burden in exchange for identical degrees at various locations at loftier costs is an outstanding idea for staying out of college-aged debt.
5. Sloppiness just may result in lost money
Not performing as well as possible in college may result in not gaining admissions to graduate, post-bacc programs, or losing scholarships instead. Lack of care exercised when studying results in such sloppiness, often snowballing into bad grades and lower post-bacc-level opportunities.
6. Not educating themselves about the mechanics of student loans
Loans are often difficult to understand. Besides, most students are unable to pay for tuition themselves, forcing them to take out student loans to earn a college degree. As such, some college attendees fail to understand student loans. If you still don’t understand the mechanics of your particular student loans after loan counseling, search online for tutorials to help.
Experiencing mistakes during our younger years is generally impossible to miss out on. Some of us luck up, although considerable portions of us don’t. Plan to budget as soon as you enter college, work to meet living expenses, and — most importantly — be financially smart!
|Ryan Bridges is a contributing writer and media specialist for the CreditSoup. He regularly produces content for a variety of business and finance blogs, based around the transitional challenges which comes with managing money and financing.