Broke Grad Student » debt

Can Indebted Students Find Debt Relief In Credit Card Debt Consolidation?

Broke Grad — Mon, 06 Feb 2012 11:00:40 +0000

The best part of college life is the ability to taste financial freedom. When you’re a student in college, it may seem that it is impossible to pay more than the minimum monthly payments on your credit cards. However, if you’re living on a fixed income where you’re earning through allowances or from a part-time job, you have to be careful so that you may save enough money and build a rainy day fund from which you can repay your credit card debts when you’re going through a credit crunch.

As the interest rates on the credit cards are outrageously high, you have to make sure that you pay more than minimum monthly payments in order get rid of debt as soon as possible. Despite taking all the efforts to get rid of debt, if you still incur revolving debt, you should get help from a credit card debt consolidation company.

How can you benefit by getting help from a credit card debt consolidation company?

The biggest issue that the college students face while repaying the debts is the fact that they have to split their payments among multiple credit card servicing companies. They have to remember multiple due dates, and this is probably the reason that they tend to forget the dates and start defaulting. Shortage of funds is certainly another reason of defaulting on the credit card payments. Consolidating credit card debt may take various forms but whichever option you choose, you’ll tend to benefit in some common ways.

The interest rates will be lowered on the credit card accounts.
The monthly payments are revised and the repayment term altered to assist the debtor to repay with ease.
You can waive off all the late fees and the penalties so that you can lower the monthly payments.

Choosing the best credit card debt consolidation company

There are many debt consolidation companies in the market that are waiting to offer their services to the student borrowers and unless you choose the best among them, you may not benefit in the best possible way.

Always check whether or not the company is registered with the BBB or the Better Business Bureau so that you may be able to know the authenticity of the company.
Go through the consumer complaints and the reviews so that you may know the quality of the services provided by the respective company.
The credit card debt consolidation company that you choose should offer you free debt counseling so that they can assess your basic financial state before offering you with any kind of help.

Therefore, when you’re someone who is still in college but has amassed a huge amount of credit card debt, you should get help from a credit card debt consolidation company so that you can repay your debts with ease and thereby lead a happy life. Stop using your credit cards further until you become free of debt.

Credit CARD Act of 2009 Restricts Credit for Students

Broke Grad — Tue, 04 Aug 2009 18:05:40 +0000

This is a guest post by Joshua Heckathorn, who runs Creditnet.com and holds an MBA and B.S. in Finance. Creditnet is a free resource for anyone who wants to learn more about credit and compare hundreds of credit cards online. When Josh isn’t glued to the screen of his Mac, you’re bound to find him at the nearest rock-climbing wall or sushi joint around Seattle.

The new rules of credit have once again ignited controversy around when one is considered a legal adult in the United States. Is it 18 or 21? We just can’t seem to make up our mind.

Yes, you can buy cigarettes and even choose to defend your country at age 18, but according to the new rules, you’re not mature enough to decide whether you can handle the responsibilities of credit. Does that seem fair? Perhaps not, but supporters of the legislation argue that young adults, whether they like it or not, need greater protection to help them avoid falling into massive amounts of debt prior to graduation.

According to SallieMae, the average college senior with at least one credit card graduated with $4,138 in credit card debt in 2008. That’s more than a 40% increase since their previous study was completed in 2004, and 2009 will likely be worse as tuition expenses soar and other lending sources remain in a deep freeze.

The rise in student credit card debt is clearly a problem, but many people aren’t convinced the new rules of credit will actually solve the underlying issue – a lack of financial education among young adults. That’s a tough issue to solve, and in my opinion it must first be tackled by those responsible for raising our nation’s youth – parents and legal guardians. But that’s an entirely different article. For the time being, we’ll just have to make due with what our elected officials have given us.

So, let’s quickly review what you need to know about this new law. Signed on May 22nd, the Credit Card Act of 2009 essentially bans credit cards for people under 21 unless they have adult cosigners or can prove they have sufficient income to support the level of credit given. No one really knows what “sufficient” income means yet, but you can expect to hear more details on this before the law takes full effect in February 2010. The bottom line is if you don’t have a credit card by next February, you’ll have to either beg for mom or dad’s signature or prove you have a job that provides enough income to support a revolving credit line.

In addition, you won’t have to sift through dozens of prescreened credit card offers in your mailbox anymore. Credit issuers are banned from sending them to anyone under 21. And there’s no need to worry about getting an unexpected credit card in the mail after signing up for a free pizza during student orientation. Giving away any type of “freebie” for credit card applications at a college-sponsored event is also banned.

While the Credit Card Act has certainly brought about some much needed changes to protect young consumers from predatory-lending practices, it’s difficult to comprehend how restricting credit for those under 21 will address the underlying issue of financial education. Parents who already foot students’ tuition and credit card bills will likely just cosign for new credit cards and continue paying the bills. Will any of these students learn more about how to manage credit wisely? Very few.

On the other hand, responsible students who are working hard to put themselves through school without parental support might discover they have no access to credit when they need it most. Of course, no credit means no credit score, which will make their lives even more difficult as they enter the real world and need to rely on their credit score to finance a car, home, or even a graduate education.

What do you think of the Credit Card Act? Do you believe the age restriction on credit will have positive long-term effects?

How To Be A Horrible Credit Card Customer

Broke Grad — Tue, 14 Jul 2009 11:00:27 +0000

There aren’t very many areas of life where you get rewarded for being bad. In fact, most of us learn at a very young age that bad behavior has its consequences — getting a spanking, having to sit inside during recess, getting after-school detention. As we get older, we realize that things really don’t change that much. Bad behavior still has its consequences although the stakes do get a little higher (e.g. ending up in jail).

However, another thing we learn as we grow up is that everything depends on your perspective. What one person sees as bad may be considered good by somebody else. Let’s take credit cards for example. From my point of view, I’m a great credit card user. Thanks to the credit card companies, I get cash back and rewards for money that I was going to spend anyway.

Credit card companies see things differently though. In fact, the credit card industry even has a name for people like me — deadbeats. That’s right. I’m a credit card deadbeat and proud of it. Guess what? You can be a deadbeat too.

Use your credit card like it’s cash. It doesn’t take a genius to realize that if you use your credit card like it’s cash, then you’ll never end up in debt. Why? Because if you treat credit cards like cash, then you’ll never spend more than you actually have. Easier said than done, I know, but nobody said being a deadbeat was easy.

Pay off your full balance each month. Once you start treating your credit card like it’s cash, you’re well on your way to becoming a successful deadbeat. The next step is simple. Since you’re already spending within your means, you should be able to easily pay off your credit card balance in full every month. Credit card companies hate that.

Cash in on the rewards. So now that you’re spending only what you can afford and paying off the full balance each month there’s only one thing left to do — milk the credit card companies for the rewards. Get yourself some cash back, gift cards, plane tickets, or whatever else you can find, and then enjoy! You are now the ultimate credit card deadbeat. Being bad has never felt so good.

Average Student Loan Debt By State

Broke Grad — Wed, 10 Jun 2009 11:00:13 +0000

A few days ago, this infographic of average student debt by state was made popular on Digg. It shows the statewide average debt levels of college graduates per state. Where do you fall on the map?

It’s interesting to note that the Northeast has higher student loan debt averages because more students attend private colleges. In fact, I got into a private college in the Northeast for grad school, but I declined in favor of a way more affordable public college in my state of residence. Otherwise, this blog would be something like Extremely and Utterly Broke Grad Student.

I find it a little surprising that Iowa has the highest student debt average at $26,208. I would have expected a state with a higher cost of living, like New York, to top the list. I’m guessing it has something to do with the state of Iowa not having enough funds to provide sufficient financial aid to students at community colleges and public universities.

On the other hand, it comes as no surprise that Utah has the lowest student debt average at $13,266. In case you didn’t know, Utah is filled Mormons, and guess what? Mormons don’t drink. Just think of all the money they save by not buying booze every weekend (which, in college, also includes Thursdays and occasionally, all of the other weekdays too). Just kidding.

The infographic also lists the most expensive colleges based on total cost (tuition + room and board) for the 2008-2009 school year. Here are the 25 most expensive colleges in 2008-2009:

None of the colleges I’ve attended made the list. However, I did get accepted into one of the colleges on the list, but maybe that’s why I didn’t end up going there.

Who Is Generation Debt?

Broke Grad — Mon, 12 Jan 2009 13:00:22 +0000

This article was originally posted at Qvisory in October 2008 as a guest post. I’m reposting it here to share with any readers that may have missed it.

Who am I? I am one of the many faces of Generation Debt. As a twenty-something recent graduate, I finished grad school with a master’s degree in one hand and a bill for $22,000 in the other.

With $22,000 in student loans, I am a textbook example of the average college graduate these days — young and broke. But instead of complaining about it, this broke graduate is on a mission to change his situation — to make an escape from Generation Debt.

When I started my fourth year of grad school, I still hadn’t received any job offers from companies that I really wanted to work for. Feeling down and discouraged, I was left with little motivation to finish my thesis and graduate. What good is a master’s degree if you don’t have a job?

What felt like a slump at the time turned out to be a blessing in disguise. Instead of writing up my thesis, I started writing about my finances, and that’s when Broke Grad Student was born.

My blog started out as a fun way to motivate myself to prepare for paying back my student loans and to share my experiences, both good and bad, along the way. I also thought it might be an interesting way to make some extra money on the side.

Less than a year later, it has already turned into much more. By blogging about my student loans and other financial topics, I’ve met college students and recent grads from all over the country who are in similar situations. Some have more debt, some less, but we all have one thing in common — an eagerness to get out of it.

My blog could be part of my ticket out of Generation Debt. As Broke Grad Student has become more popular, the small amount of income it generates has gradually turned into a decent amount of money. In fact, I’m currently making enough blog-related revenue to cover my monthly student loan payments.

Of course, I have to pay for living expenses too. Gone are the graduate research assistant days where I lived off of a monthly stipend. Ironically, shortly after starting Broke Grad Student, I landed a job with one of the top companies I wanted to work for. Things have a tendency to happen when you least expect them.

While my salary is enough to cover my living expenses and student loan payments, the extra blog income has allowed me to build up an emergency fund and invest more money into retirement funds at the same time. These are key elements in my plan to escape from Generation Debt.

Contrary to what you may see and hear in the media, Generation Debt isn’t just a bunch of whiners, complainers, and slackers. There are still plenty of us who haven’t given up. We are the ones working hard to live frugally, save for the future, and pay off our debts.

I’m sharing my story, because I want other members of this generation of debt to know that you aren’t alone. We’re all in this together, and we should help each other out by sharing our knowledge from our successes and our failures.

This is my story so far. What’s yours?