Financial problem among student
Students In Financial Crisis: How Academic Advisers Can Help Reed T. Curtis. university of South Carolina Editor’s note: This Is the eighth In a series of articles written by students enrolled In Jennifer Bloom’s graduate seminar on academic advising at the university of South Carolina for the 2007 fall semester. As part of her course syllabus, Dr. Bloom required each student in her class to submit an article to The Mentor or other publications for consideration.
Introduction Given that tuition and fees at colleges and universities are rising at a pace hgher han the cost of living, students face an Increasingly difficult burden of funding their educational pursuits. Since the 1980s, the cost of higher education has skyrocketed; college tuition and fees have risen by 375 percent, while the average household income rose only 127 percent (Hunt et al. , 2006, p. 19).
According to a 2006 united States Department of Education report, “Our higher education financing system Is increasingly dysfunctional [as] state subsidies are declining, tuition is rising, and cost per student is increasing faster than inflation or family income” (p. 0). This report also found that state funding of education hit a new low in 2005. All of these factors have led to unprecedented levels of debt for college graduates. King and Bannon (2002) reported that 64 percent of college students graduate with debt; 39 percent of them have debt that is deemed unmanageable.
King and Bannon define unmanageable student-loan debt as a debt load that exceeds 8 percent of a graduate’s pre-tax yearly income. Minorities are more likely to have an unmanageable student-loan debt. Fifty-five percent of African American and 58 ercent of Hispanic graduates compared to only 37 percent of Caucasians graduated with unmanageable debt (King & Bannon, 2002). Another Indicator of the extent of this problem is that 60 percent of college students move back in with their parents after graduation, helping to define a growing trend coined as “the boomerang generation” (Experience Inc. 2006). Graduates’ reasons for moving home after graduation vary, but 48 percent of “boomerangers” move home because of financial problems (Experience Inc. , 2006). As The Project on Student Debt (2007) explains, the “prospect of student debt can prompt students to compromise on ollege choice, drop out, or forego higher education altogether” (p. 13). In fact, students who lack financial security are more likely to do worse In college, drop out, or even commit suicide Oohnson, 2005).
The purpose of this article is to stress that strengthening financial literacy among academic advisers Is now a critical aspect of working with and empowering today’s college students. IOF6 lypes 0T student De It is also important to understand that student debt is diversified and is not simply linked to student loans alone. Students are now increasingly using credit cards to over additional college and life expenses Oohnson, 2005). In 2004, 66 percent of all first-year students already had at least one credit card before stepping foot into their first college classroom (Nellie Mae, 2005).
Even more alarming is the fact that the number of credit cards students possess increases each year throughout college, with 56 percent of seniors carrying four or more cards compared to 15 percent of first-year students with four or more (Nellie Mae, 2005). Reasons for this increased student dependence on credit cards include heavy credit-card solicitation, easy ccess to credit cards, increased living and school expenses, and lack of financial literacy Oohnson, 2005).
Credit card companies are tireless solicitors of college students despite campus regulations and other measures of prevention Oohnson, 2005). Here are Just some of the issues that relate to credit card use and abuse on college campuses: The Collection: Credit card companies participate in aggressive and emotionally abusive efforts to collect payments. This becomes a huge distraction for students who may already be struggling in school.
In the face of these mounting inancial pressures, some students may get additional student loans to pay their credit card bills, some take on additional Jobs that reduce time for academic studies and extracurricular opportunities, some students drop out of school to earn more money, some become depressed and some of those even attempt to or do commit suicide Oohnson, 2005), and others are forced to declare bankruptcy. Bankruptcy rates tripled between 1995 to 2000 among people younger than 26 years old Oohnson, 2005). Stigmatization: Students feel alone in their financial crises and sometimes are too embarrassed to seek advice from others.
Many do not feel comfortable telling people about their situation, because they feel that others will see them as “stupid” or completely “irresponsible. ” Going to their parents may seem to be a plausible option, but many students fear their parents’ anticipated disappointment and anger, and thus feel completely alone when faced with mounting bills, classroom assignments, living expenses, and expectations Oohnson, 2005). The Burden: In most cases, there are no easy solutions to student debt loads. Students begin to recognize the lifelong implications of their previous financial decisions.
The financial situation becomes constant and requires lifestyle changes, some of which limit students’ ability to academically succeed Oohnson, 2005). The burden of credit card debt haunts many students and can lead to a multitude of problems. A student stressed over credit card debt may suffer “additional financial, psychological, and physical problems” Oohnson, 2005, p. 209). Because students’ financial instability during college can lead to depression and suicide Oohnson, 2005), advisers should be on the lookout for warning signs and know how to effectively refer students to mental health services.
Academic advisers should also be aware of the increased risks of financial instability among minorities and establish communication wltn tne multlcultural servlces avallaDle on campus. As advisers, it is extremely important to have a basic understanding of the higher- education financial climate and the ways that students can obtain aid (Sutton, 2002; Moran, 2002). With the help of academic advisers, college students may be able to avoid financial disasters. Education Advisers should work Just as hard to encourage and instill financial literacy in advisees as they impart tips for academic success.