September 2007 Archives

Barbara

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For a number of my friends, formal education didn't stop at our undergraduate commencement. Many are now taking graduate level classes towards a master's degree. Some are taking classes on top of a full-time job, some are working part-time and some aren't working at all.

I'm always interested to see which of those options grad students choose. What are you, your friends or your family doing?

Each option has its perks and pitfalls. There's not a singular best option for all graduate students – it depends on the individual situation. The choice can be based on a number of variables, like what kind of program the student is in, the need for a steady income, or how much money the student wants to borrow. Caroline addressed the financing piece in an earlier post back in May.

Here are a couple things to consider:

Tuition assistance: For those students who choose to work full-time, many employers offer a tuition reimbursement program  so employees can continue their education part-time while they are working.

Grants and assistantships: Sometimes instead of working part-time outside of school, graduate students can get financial assistance through assistantships  in their own department. Usually students must be attending full-time to qualify for a GA position.

Attending school part time : Even if your employer doesn't offer tuition assistance, having the income and benefits from a job may give you the ability to take a class here and there, working slowly toward an advanced degree.

Working part time: Working part time while attending school full-time may mean borrowing less money through student loans, which could save you money in the long run.

Workload: For many programs, there really isn't an option to work. With heavy loads of homework, some graduate students just need to focus on their studies.

Are there any graduate students or former graduate students out there with advice for those facing the work conundrum?

Caroline

Anyone interested in free money for college? Scholarships aren't always easy to come by, but they're definitely worth the effort.

If you're a high school senior, you should begin your scholarship search now. Deadlines come up very quickly, and some scholarship applications are more work than others. Barbara offered a great post a few months ago full of advice about seeking out scholarships.

To get you started, I've got a couple scholarship opportunities to tell you about:

• Wells Fargo CollegeSTEPS® Program & Scholarship Sweepstakes: This is an easy one. It's a program that offers free college-planning tips (via email) AND the chance to win a $1,000 college tuition prize. Enroll online at the above link, and you're done. You can sign up for the CollegeSTEPS Program at any time during high school (freshman through senior year). Once you enroll you'll start receiving grade-appropriate college-prep information (don't worry, we don't bombard you – you'll get a couple emails each school year from us). During your senior year, you'll automatically be entered for the sweepstakes drawings. Check out the official rules to ensure that you're eligible.

• Wells Fargo/UNCF Scholarship Fund : This is a scholarship for undergraduate sophomores, undergraduate juniors, and graduate students attending historically black colleges and universities. Eligible majors include Business, Finance, Accounting, Architecture, Electrical Engineering, Computer Engineering, and Systems Engineering. Scholarship amounts are up to $2,000. Don't delay in applying for this one – the deadline is October 31, 2007.

Another opportunity to kickstart your scholarship search is to try out the Peterson's Scholarship Search . This tool allows you to search specifically for scholarships based on your talents and interests.

I hope these suggestions help get you started. Good luck in your search!

Staci

I just returned from a quick business trip to Las Vegas , the city of ultimate decadence. But not to worry — much to my mother's chagrin (she loves to play the penny slots), I didn't gamble a cent.

While I was there I had the chance to visit the UNLV  campus with a few colleagues, and I left feeling three emotions: impressed, jealous, and disheartened.

I was impressed with the campus itself — it's open and sprawling, with an architecturally stunning, technologically advanced library and a gorgeous, brand-new student union building. This year UNLV is celebrating its 50th anniversary  — also an impressive milestone.

I was jealous because in the gorgeous, brand-new student union building, there are — among other things — funky comfortable chairs, tons of natural light, wireless internet access throughout, and a food court that would put any shopping mall to shame. The place was hopping, filled with people and energy, and busier than a casino on the Strip.

And I was disheartened because I observed young UNLV students throwing money around like crazy. There were huge lines at both Starbucks  and Jamba Juice  — certainly not cheap at $4 a pop. Students were streaming in and out of the campus convenience store with their arms full of Red Bull and bottled water. Most of the students I saw were using cash, although some used credit cards or their Rebel Cards  to pay for their expensive beverages.

As we walked around, my colleague Rachel said to me, "I would've spent all my student loan money in here!"

Sadly, student financial services at UNLV are relegated to an older, out-of-the way building. Other than a few people in line to pay their bills at the Bursar's Office, no one was there.

I'm not trying to pick on UNLV, because this on-campus decadence isn't limited to Las Vegas. Colleges are undoubtedly responding to the demands of their student populations, and giving students what they want. This generation  seems to want lattés and smoothies and energy drinks not just as occasional treats, but as daily purchases.

College life has come a long way since I graduated, but so have the temptations to spend on campus. For those of you out there living it right now, how do you balance those wants and needs? Or do you not, and just figure you'll pay for it later?

Karen

A funny story comes to mind about my son when he was about 5 years old. He assumed that since Mommy works at a bank, she can just get money out anytime she wants. Oh, if it were only that simple.

Fast forward about 7 years to the future – now he thinks that a credit card is the simple solution to anything we could ever want.

"Why, he asked me very innocently, "can't we get a Wii ?

I reminded him matter-of-factly that money doesn't grow on trees and, besides that, Wii's cost a lot of money. I thought that would end the discussion. This time, however, he'd been thinking a lot about his response.

"You have a credit card, he said. "Why can't you just buy it with your credit card? For some reason, he's convinced that a credit card is just like a gift card you get on your birthday. Someone gives you money to spend, so it's your duty to spend it.

I've fallen short of my parental role because what he really needs to know are the basics. Luckily, there's this great, online educational tool from Wells Fargo called the Hands on Banking® program that I haven't introduced him to yet (but it sounds like I need to start soon). The Hands on Banking program guides you through the fundamentals of smart money management, dividing learning into four different age groups: 4th & 5th grade Kids, 6th to 8th grade Teens, Young Adults and Adults. It's one of those things that I wish had been around when I was venturing into the world of credit – kind of like how I wish there'd been Wii's around when I was younger.

But don't feel too bad for my son. He may not have a Wii, but he is armed with the knowledge that it's something he has to work for to get.

Too bad Wii's don't grow on trees.

Editor's note: We're excited to benefit from Karen's customer insight (and killer dance moves) here on the Student LoanDown!

David

"Pssst! Hey, buddy, can I interest you in some free cash?"

Most people would run away or think, "Yeah, right. What's the catch?" But earlier this year, I did indeed get a check for $600 – and I didn't have to spend a penny to get it!

OK, I lied. I actually did have to spend a lot to get it. But it was on things I needed anyway, like groceries, gas, restaurants, etc.

See, I have an optional rewards program on my credit card, so I get one point for every dollar I spend. Whenever I buy something, I use my credit card and get points. When I fill up the gas tank, I get points. When I buy a latté at Starbucks , I get points. When I travel and buy a plane ticket with my card, more points. This spring I reached 50,000 points and called up to get my $600 check. Score!

You can get your own check, too – but rewards programs aren't for everyone. The key is: You have to be able to put as much of your spending as possible on your credit card, and then pay it off in full – on time, each and every month. If you can't do that, the "free" cash will suddenly become a lot more expensive! Finance charges for any balance you carry and late fees for not paying on time add up very quickly! If you aren't very careful and responsible, you can get into trouble fast. So it's best not to try these programs if you think you'll be tempted to overspend or you won't be able to pay on time.

Also, while I don't have to pay an annual fee for my credit card with rewards (another great benefit of working for Wells Fargo!), you may or may not be able to get the rewards program for free. Check with your friendly neighborhood banker to find out.

Well, I've got to run. I've got 600 bucks burning a hole in my pocket, and I've got my eye on one of these... 

Editor's note: Finally, the Student LoanDown adds a male blogger to the team – it only took a year. Welcome, Dave!

Caroline

Most students head off to college full of anticipation. Your life's finally getting started, you've got a newfound independence and you're on way to a real career.

I hate to be a Debbie Downer  here, but despite all those high hopes, by the end of freshman year about 30 percent of students have dropped out. And according to the Department of Education, around 50 percent never graduate at all.

I'm only bringing this up because I don't want it to happen to you. If money is the problem , consider this: college graduates earn roughly twice as much  as non-graduates over a lifetime. You really don't want to leave school with the double whammy of debt and no degree. If you're struggling with money, get yourself to your school's Financial Aid Office right away. They're the best people to help figure out your options.

Unfortunately, many students drop out of school because they simply don't know what it takes to stay in college — I've seen this with my own eyes. Here are some simple suggestions that will go miles toward keeping you in college:

1. Go to class. You know how they say "90 percent of life is just showing up"? This definitely applies in college. No one's there to make you go, and it's going to be tempting to skip sometimes, but you have to show up for class. When you get there, if it's a big lecture hall, sit up front. You'll be less distracted, you'll hear better, and you'll automatically pay more attention because the professor can actually see you.

2. Study . Study between classes whenever you can. Even if you've just got an hour, you can review your notes, read a chapter or outline a paper. In the evenings, find a quiet place away from distractions. If you're struggling in a class, see your professor, teaching assistant or advisor — they may be able to help you get a tutor.

3. Stay on campus on the weekends. During your first year of school, it can be really tempting to run back home on the weekends, but don't give in. Finding yourself at loose ends on a weekend may feel strange, but there are plenty of other freshmen in the same boat. Stick it out — you've got to commit to making friends and finding a life at school if you want to succeed

4. Don't go out on weeknights. This ties directly to point #1. Simply put, you'll be less-inclined to skip class if you weren't out the night before. You don't have be a hermit during the week — have a TV night   with your friends, go for study snacks, whatever keeps you sane. But treat college like a full-time job: Take it seriously and save going out for the weekends.

What do you think? What does it take to stay in college these days?

Dinna

What was our big summer trip this year? We didn't go Costa Maya, Costa Brava , or Costa Rica — but it sure did "costa lotta!" Sorry, couldn't resist the pun.

Our family vacation was a road trip to "The Happiest Place on Earth": Disneyland ! With my five-year-old getting ready to start kindergarten, my two-year-old obsessed with princesses, and the newly-opened Finding Nemo  ride to check out, Disneyland was the perfect destination to please the whole family.

But jeez, it was hot, hot, hot! The new Nemo ride was very well done, but the wait in line was at least 1½ hours and we were just melting. On the other hand, since everyone was in line to find Nemo, other favorites like the Pirates of the Caribbean  and the Haunted Mansion  were only a 5-10 minute wait. Sweet! Plus, the rides were air-conditioned — ahhhhhhh...nice!

We all had a great time! If only going to Disneyland were FREE it would truly be the happiest place on earth for parents.   We thought the trip would be cheaper than going to Europe, but after reviewing my credit card statement online and seeing the cost of the hotel, park tickets, breakfast with characters, dinner at Ariel's Grotto, princess costumes, collectible pins, autograph books, and many other priceless souvenirs only found in the Magic Kingdom — well, maybe we should've just gone to Neuschwanstein  instead to see the real Cinderella Castle!

Next time we'll do a better job of budgeting ahead of time and practicing self-restraint with our spending. I'll have to stop myself and think: Do we really need another princess outfit? Will I have sleepless nights if I don't buy that limited-edition collectible pin, light-up Mouse ears, or $18 spray water bottle?

Have you ever spent more than you expected? Do you have any tips for how to control spending on your credit card?

Caroline

I used to love back-to-school time. Now, I still share Staci's love of school supplies, but as a parent, "back to school" time can be hard sometimes. The first time you send your kid off to school it's tough — suddenly your round-faced "baby" is wearing a "Lightning McQueen"  backpack stuffed with crayons, juice and baby wipes. (That's what they request at preschool these days.)

But when you send your kid off to college — like many of you probably did over Labor Day weekend — it's even tougher. Suddenly your "baby" is leaving town with your car and a laundry basket full of clothes. And this time, she won't be home in three hours, ready for a nap.

Recently, I found a great article  in the Des Moines Register about how parents handle sending their kids off to college. It profiles three families: one with a senior in high school, one with a student about to start college, and one with a student who's just completed his freshman year of college. There are also some good tips for parents and students found in the article's left sidebar.

So parents, tell me: How are you coping with sending your kids off to college?

Barbara

A while back I told a reader that I’d faced my own Stafford Loan conundrum in college. If you’ve been reading the Student LoanDown for a while, you know I didn’t take on any student loan debt to attend college, thanks to a full-ride scholarship.

But after a summer internship in Fargo, N.D., I thought about accepting a Federal Stafford Loan. Living on my own for a summer — making a small but adequate salary — I incurred some credit card debt to covering some necessities like groceries and other living expenses.

Because of my credit card’s high interest rate (about 17%), I wanted to throw all of the money I was going to make working that upcoming semester toward my debt. But that’d have me cutting it close on living expenses, since that’s what the money usually covered.

So when my college’s financial aid award letter arrived a little more than halfway through the summer, I took a second look at the funds I was offered. Alongside my two scholarships was an Unsubsidized Federal Stafford Loan — for somewhere around $2,000.

Even though I had scholarships coming my way, my dad had me fill out the FAFSA (Free Application for Federal Student Aid) every year just in case my situation changed. And with all the benefits of federal loans, it was a smart plan.

But when I looked at that loan on my award letter, I didn’t know if I should take it. In my mind, because I had my tuition covered and a little left over to live on, it seemed wrong to take the money.

I opted not to take the loan. Instead, I faced a financially tight year, and ended up with more debt after having to use my credit card in a pinch — well, several pinches. Definitely not the smartest decision, considering the Stafford Loan rate would have been 4.70% while I was in school and during a six-month grace period after graduating!

For those of you wondering what you can use Federal Stafford Loan money to pay for, here are the details from the Promissory Note. You can use a Federal Stafford Loan to pay for:

• Tuition
• Room
• Board
• Institutional fees
• Books
• Supplies
• Equipment
• Dependent child care
• Transportation
• Commuting expenses
• Rental or purchase of a personal computer
• Origination fee and federal default fee
• Other documented, authorized costs

So, bottom line: if the school awards it to you based on cost of attendance, expected family contribution, other financial aid, etc., and you use it for an authorized expense, you’re good to go.

Wish I’d looked into this two years ago! :)

Staci

Today the Student LoanDown blog celebrates its first anniversary!

A year ago, I wasn’t sure if we’d reach this milestone. I strongly believed in our blog and its mission, but I was concerned that a Wells Fargo blog about education financing and debt management might not be embraced by students, parents, or the blogosphere. After all, these aren’t the sexiest of topics.

Well, here we are, more than 150 posts and countless exchanges later, still going strong. We don’t always hit the mark, and we certainly don’t always agree — but at least we’re talking.

Now the traditional first anniversary gift  is paper, one of my many addictions (seriously, ask Barbara or Caroline what happens when I approach a Hallmark®  store). But we’re not expecting any presents to commemorate this occasion. Rather, we want you to know that your presence is our gift. And as we move into our second year, we hope you’ll continue to come to the party, offer your insights, and push us to discuss the tough topics.

Congratulations — this first anniversary is just as much yours as it is ours.