SASFAA Nine News

Survival tips to give your graduating students

Chansone Durden, TG Account Executive Team Manager

Graduation can be a surreal moment in a student’s life. One minute, you’re living on campus where the basics — shelter, food, creature comforts — are taken care of. The next, it’s time to find a new home, prepare meals, pay bills, and do all the other things independent adults do. The shift from life in a bubble to life on the outside can be jarring.

Even worse, this dramatic change comes at a vulnerable period. Most new graduates are also just starting a career, establishing their finances, and repaying that first long-term, substantial debt — student loans. Studies show that if loan delinquency occurs, it often happens during the first year of repayment.

The following key suggestions can you help your students lay a strong financial foundation right out of school.

• Price check on Aisle 10 — After four or five years of relative austerity, students might have an appetite for spending and spending big. When the paychecks start rolling in, the temptation is clear: What do I want? The trick is to satisfy that pang on the cheap, and as with so many things these days, there’s an app for that. Eyeing the latest tablet computer? Tired of hand-me-down college furniture? Need a new appliance to replace a dying one? Smartphone apps like BuyVia, RedLaser, PriceGrabber, and ShopAdvisor can compare prices for an item, recommend a good time of year to purchase, store credit card information, and even scan barcodes to check for alternate product choices.

• Budgets made easy — Recording purchases and carefully saving for a rainy day are necessary but dull tasks. Online tools that streamline money management can help. Xpenser lets you import your bank statement, analyze purchasing patterns, create reports, and even track car mileage. Budget Tracker works similarly but also lets you compare interest rates on credit cards and create email reminders on bills. Both apps are easy to use and — best of all — free.

• Spending too much? Step (it) down — Have a need but not the cash? Satisfy your desire with a cheaper version. Better yet, reduce your expectations and take steps to spend less for what you need or want. Do you like to eat out? Settle for your favorite restaurant fewer times per week, or eat at a less expensive establishment, or cut out items like desserts and appetizers. You could even make yourself the same things at home using online recipes. Need to find a place to live post-college? Renting a house would be ideal, but not budget-friendly. How about an apartment? How about an apartment with a roommate? Or how about renting a room for a while? Your income and expenses, along with what’s most important to you, will dictate how you “step down.”

• Let your priorities do the talking — That last suggestion brings us to a priority-setting exercise, which can serve as a foundation for setting up a spending plan. Take an expense like housing or a car and compare it to a series of other expenses, like vacation or college. With each pairing, pick the item you value more. Once you’ve completed comparing and choosing, count up the number of times you picked the item (i.e., housing or a car) under evaluation. Do this exercise with a whole series of needs or wants like clothing, retirement, cars, dining out, etc. You can then rank all these items in a list by the number of times chosen, highest to lowest. This ranking serves as a priority list, showing you where you might spend more money in order to satisfy your needs.

• Options! Options! You’ve got repayment options — As you know, one of the advantages of federal student loans is that they come with emergency parachutes, also known as repayment plans and options. Sometimes, the best way for a former student to cut costs is to choose a different repayment plan. A great example is Income-based repayment (IBR). Say you made an adjusted gross income of $18,000, had a debt of $35,000, and a family size of one. Under IBR you would pay about $10 per month. Sounds affordable, right? However, repayment will keep pace with income. Deferment and forbearance, which postpone repayment for a time under certain conditions, are other options, but offer short-term solutions.

Now put it all together — Exit counseling is an essential last task for departing and graduating students. How about adding some of the information described above to that last in-person or online counseling session? You could even turn the recommendations provided here into a small portfolio of resources that students can take with them — a folder stocked with vital loan contact information, brochures on repayment options, and tips on money management and post-college budgeting. After the dust of graduating and relocating has settled, this resource could serve as a guide on life after college and be as important, in its own way, as a diploma or certificate.

Chansone Durden is an account executive team manager with TG serving schools in SASFAA. You can reach Chansone at (800) 252-9743, ext. 6710, or by email at chansone.durden@tgslc.org. Additional information about TG can be found online at www.TG.org.