Financial Literacy: What College Students Need to Know

"Given the rising cost of tuition, college students need to be more informed than ever about the implications of paying for higher education. But making financial decisions – including around budgeting, taking out loans or investing – can be daunting, and many college students feel ill-equipped to do so," U.S. News and World Report writes.

..."When transitioning from high school to college, students should learn to budget, track spending habits and understand loans, experts say.

One rule of thumb is 'don't spend what you don't have,' says Dana Kelly, vice president of professional development and institutional compliance at the National Association of Student Financial Aid Administrators. She advises students to avoid using a credit card while in college.

'That's where budgeting really comes into play because if you're sticking to your budget, then you're working with the cash that you have,' she says. Students who decide to use a credit card in college should be clear on what the interest rates are, what a credit score is and how to make payments on time, Kelly adds.

If you have money left over for the month, Janssen recommends dividing it into thirds. One-third can be used for something fun as a reward. The next third is to pay off any debts while the remaining funds can be invested or saved.

Develop an early habit of saving, if possible, Kelly says.

'Even if you start putting away even small amounts, you are fostering a really good habit there,' she adds. 'And then as you get through college and you move into that first apartment, you then have something to put away and potentially can look at other investment options and growing that savings.'"

NASFAA's "Notable Headlines" section highlights media coverage of financial aid to help members stay up to date with the latest news. Articles included under the notable headlines section are not written by NASFAA, but rather by external sources. Inclusion in Today's News does not imply endorsement of the material or guarantee the accuracy of information presented. 


Publication Date: 12/8/2022

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