Before and During College: A Car on Campus Can Create Colossally Causeless Costs

IMG_8107Most colleges and universities have vast student parking lots, sometimes unpaved areas on the outskirts of campus, generally poorly patrolled and supervised. Apartments near campus may also feature parking lots or nearby on-the-street parking.

The automobiles students bring to college quickly fill such parking places. And what could be more natural? Any young person anticipating the freedom of being on his own will also look forward to the convenience that comes with having a car.

But a vehicle at school also needlessly inflates college-related costs and educational debt. Consider:

  • Parking Fees: One large university near us charges its students as much as $796 per year to park on campus. Increased borrowing to pay this fee for four years at today’s federal college loan interest rates can inflate the total amount repaid by more than $4,000.
  • Maintenance and Upkeep: Gasoline, oil changes, and other auto-related expenses add up as the academic year goes along. Such costs can be deferred, if not skipped altogether, when your student’s car stays at home.
  • Damage and Vandalism: Cars sitting on the street and in remote, under-supervised lots are more prone to damage — from hailstorms, slashed tires, frozen batteries, collisions if others carelessly reverse or cut corners too closely, etc. Sometimes your student may need to pay for a tow job to the nearest repair shop just to get his car working again.

Most campuses are either small enough to cross on foot or have shuttle bus systems that are free to their students. And the municipal transit systems in many college towns also allow students to ride free or at reduced rates.

IMG_8108Your student may ask, how will I ever get home if I don’t have my car? This may be valid. But reasonably-priced bus services and trains often run between your state’s major colleges and large metropolitan areas. And if public transportation isn’t available, your student can probably get a ride straight to your door by offering to share gasoline expenses with a fellow student.

Now if a student commutes from home or to a job at an off-campus location not served by public transportation, a car may be necessary. Otherwise, a vehicle at college is an expensive and unnecessary luxury. So counsel your student to cut his college costs by leaving those wheels at home!

College Affordability Solutions offers guidance on a wide array of strategies to keep higher education costs, and higher education borrowing, as low as possible. Email collegeafford@gmail.com or call (512) 366-5354 for such guidance.

Before College: Prepare Your Freshmen to Manage Those First-Year Finances

Ever noticed college campuses and their surroundings? All those apartments, bookstores, dormitories, shops, and restaurants. They’re run by people called IMG_8045“landlords” and “merchants” — responsible, solid folks who make good friends and neighbors. But, at work, their job is to separate students from their money, and at this they’re exceptionally talented.

Dropping 17-19 year olds amongst these skilled professionals is almost unfair. For all their academic ability and digital literacy, young people on their own for the first time often aren’t savvy about considering, much less comprehending, the consequences of their financial decisions. Result? They can easily become the victims of slick marketing campaigns and peer pressures.

IMG_8046In the short run, this contributes to stress, frantic calls home for more money, skipping meals, borrowing too much, working too much, and even dropping out. In the long run, it’s one reason why 40% of college students don’t get degrees, 45% of college graduates live with their parents two years after commencement, and 50% of college graduates need financial help from their families.

Fortunately, today’s students and parents are generally close, so your students often want your guidance. This allows you to use your experience from decades of managing (and mismanaging) your money to help them avoid mistakes in managing theirs.

They’ve probably learned some things by observing you. Still, there are important matters you should make absolutely sure they understand — through frank discussions before they go to campus, by “just in time” phone counseling while they’re at school, or both. Here are some of these issues:

Budgeting: How and why to map out monthly income and expenses, track spending, routinely review and modify budgets.

Checking Accounts, Credit and Debit Cards: How to write checks and use debit/credit cards. Associated fees. Avoiding impulse purchases. When credit card interest kicks in and when to make credit card payments.

Comparative Shopping: How and why to comparatively shop for everything from checking and savings accounts to credit/debit cards to apartments, books, and clothes.

ID Theft and Scams: Securing their checkbooks and credit/debit cards. Avoiding scams. Protecting their critical personal information. What to do if their ID is stolen.

Saving: Why and how to save, even if only a little for a short time. How to open and manage savings account

Teaching your students about these first-year financial issues can protect them, and you, this year and for years to come!