STUDENT SURVIVAL GUIDE '08: Money 

BY KATHY LALUK

OK, freshman. You've made it to college. Gone are the days when report cards, newsletters, and class schedules get mailed to your parents instead of you. Now, the envelope that comes is yours to cherish, and the five- or six-figure tuition bill sitting inside is your responsibility.

            It's a harsh reality that catches a lot of freshman off guard. Hey, you're just getting used to being totally on your own for the first time, and adventures in laundry and cooking aside, paying the bills may not be something you are sure how to do just yet.

            College costs are soaring, and show no signs of stopping. According to published reports, tuition for private colleges and universities reached as high as $50,000 for the 2007-08 year, and while public universities typically charge less, costs have been growing more steeply as government support has lagged, and trends have driven costs up across the board.

            Meanwhile, credit card companies have gotten smarter and tend to target doe-eyed 18-year-olds just set out on their own in the real world. While that rectangular, brightly colored piece of plastic in your wallet may seem to secure your independence, the interest rates and late fees may tie you down financially -- and fast.

            So how are you supposed to keep yourself a float? Gary Thurber, assistant director of community relations for Consumer Credit Counseling Service of Central New York, Inc., says that inevitably, almost all students will have some sort of debt attached to their higher education. But there are ways to reduce it significantly.

            "For most students, having zero debt is unavoidable," Thurber says. "There are ways, however, for them to avoid as much as possible."

Thurber says that the first step to managing the looming possibility of debt is to organize all your bills and figure out your all your expenses, including phone plans, computers, books, travel, meal plans, entertainment, housing, laundry and, of course, tuition.

            "Try to get a handle on that as close as you can," he says. "It's a scary thought for most freshman, I know, but once you know what you're paying, it's easier to go about actually paying it."

            Student loans are also a way to help pay for school, Thurber says, but you always have to pay them back (and usually with lots of interest). Last year alone, students took out more than $78 billion in loans, both federal and private. If you decide to take out a loan, make sure you know and understand the terms and interest rates of the loan. If you're unsure of something, ask if your parents can co-sign the loan -- this can usually help keep interest rates down, which will help you pay back the money more quickly once you graduate.

            But before you go filling out loan application, consider a better first option in student scholarships and grants. These can be worth anywhere from a few bucks to thousands of dollars.

            "What a lot of students don't look at enough is grants and scholarships," Thurber says. "You know, there's thousands of dollars that go unclaimed every year, and those items don't even need to be paid back."

            You might not know it, but there are scholarships for everything -- you'd be surprised -- and it's not just about writing essays and submitting good grades. How'd you like to get money for school for creating your own music video? Or making the best original greeting card? Or for your love of clog dancing? There are scholarship opportunities for anything and everything you can imagine -- and probably a few that you can't.

            "[Scholarships are] a really a good way for students to get some funding for their education," Thurber says. "There's money there, and students really need to do their research when it comes to this."

            For the 411 on scholarships you may be eligible for, check out fastweb.com. After filling out a lengthy survey (don't worry, it's worth it), you'll be able to view a customized list of scholarship, internship, and even job opportunities you might be interested in.

One of the most popular ways for students to pay for things once their parents drop them off on campus is a credit card. And while the whole "buy now, pay later" mentality is easy to get sucked into, you have to be careful: many students end up in even more debt. Nellie Mae, a student loan company, reported that college students are nearly 10 times more likely to pay their bills late than adult cardholders.

            Thurber says that although there are some risks involved, getting a credit card for occasional spending is a helpful way for students to build a good credit rating, which may help them later in life.

            "Part of the college experience nowadays, besides learning budgeting skills that were never used before or were never taught before, is this is a time where it's OK to establish a little bit of credit," he says. "I'm not saying all incoming freshmen should get credit cards and go hog wild, but using it sparingly to establish good credit is actually a good thing for students."

            Another common first-time experience for many freshmen is the part-time job. According to a 2007 annual national survey conducted by the Higher Education Research Institute at the University of California, 29 percent of students said they would use at least some of their paycheck toward tuition and educational expenses.

            Even though working in the dining halls or the bookstore may not sound like glamorous options, more and more students are seeking jobs, even though federal work-study funds decreased by nearly $10 million this past academic year (work study funds are set aside for on-campus jobs for students). Thurber says getting a part-time job may not make you a millionaire, but it might give you a little extra spending money. Just make sure it doesn't get in the way of your studies -- after all, it's what you're there for, right?

            At the beginning of our interview, Thurber promised that he'd save his best bit of advice for last. And, he did: keep track of your expenses and your spending, but don't stress too much about it all.

            "Paying the enormous bill is part of the college experience," Thurber says. "But it shouldn't detract from it."

SIDEBAR:

Avoiding credit card debt

In addition to the tuition bills flooding your inbox each year, a few more envelopes will pop up in your mail soon -- if they haven't already. Instead of a multiple-figure bill, inside you'll find a small, rectangular piece of plastic. And unlike those tuition bills, this colorful new toy seems relatively harmless (or so you think).

            More and more, credit card companies are targeting teens and young adults for new credit cards with seemingly unreal rates and promises. Zero percent interest, a sky-high limit -- these offers make most of us think we're holding a very powerful piece of plastic. And we are.

            The power of the card usually goes to our head, and it can get out of control fast. You might start out responsibly, putting groceries or gas on the card. But it's a slippery slope, and suddenly that can become dinners, textbooks, movie tickets, etc. It's easy to get swept away.

            The money may seem free, but there are serious strings attached, and you need to watch out. If you go over your limit, an extra fee may pop up on your bill. Spend too much and you might not be able to pay it all off. But those penalties are tame compared to what happens if you pay late. High interest rates are often attached to most credit cards -- as much as 18 percent to 20 percent of your balance -- and can make your bill spiral out of control, fast. In 2004, USA Today reported that undergraduates in America had an average outstanding credit card debt of $2,000 or more.

            Gary Thurber, assistant director of community relations for Consumer Credit Counseling Service of Central New York, Inc., says that establishing some credit at a young age is a good idea, but you have to make sure you know what you're getting yourself into.

            "You really have to be careful and make sure you read the fine print," Thurber says. "So many people -- not just students -- get caught off guard by these kinds of things."

            Here's some advice from Thurber to help you avoid a sea of credit card debt:

-Find a card with no annual fee

-Get a card with a low limit (no more than $500-$800 max) and stay below it

-Check for hidden fees -- registration fees, start-up fees, monthly fees, etc. -- that could reduce your spending limit

-Always, always pay on time

-Make sure you understand credit card terms, including Annual Percentage Rate (APR), interest and late fees

-Know how much you can afford to spend

-Don't be afraid to ask for help from parents, friends or even organizations like credit counseling services

-- BY KATHY LALUK