University/College and Credit

The Student Debt Trap

Student Debt Facts

The cost of tuition and fees for a school year is well over $5,000 today, and that doesn’t include living expenses. There was a time, years ago, when a university or college student could work for 16 weeks in the summer and have enough money saved to pay his/her tuition. That is rarely the case today. Unless you have been able to save all of your past summer earnings or have family who are willing to pay for your post secondary education chances are you will be applying for some type of funding you will have to repay once you complete your education.

As you are applying for your student loan, it is also important to know there are many scholarships, grants and bursaries, both merit and non-merit driven, available today. Studentawards.com has a comprehensive list of this funding on their website. www.studentawards.com

With the increasing cost of a post secondary education, it is easy to understand why the number of student credit cards issued in Canada is on the rise as well. There are many advantages to obtaining credit while still in school as long as you ensure you are an educated consumer.

Advantages to Student Credit Cards:

• Allows you to establish credit slowly and responsibly
• Credit card statements track your spending
• Most credit cards offer points or rewards programs when you spend responsibly and pay on time
• It is safer than carrying cash on campus
• In an emergency, a credit card can be very helpful

Rule of thumb:

Only use your card for what you would normally pay cash for and then pay off your card in full each month. This will not only avoid getting into too much debt, but it will also help you to build a good credit history.

Potential Disadvantages of Student Credit Cards:

• Spending money you do not have
• Falling behind on payments due to lack of available funds
• Opening too many accounts because you were enticed by the “freebies/points/gifts”
• Allowing friends to make purchases and not repaying you by the statement due date

Credit is something that will stay with you for your entire life. Start out the right way and be proud of the decisions you made while in school. Establishing good credit is the first step on your journey through your adult life; make it a step in the right direction!

For more information, or if you feel that you might be in trouble with your debt, contact Consolidated Credit Counseling Services of Canada, Inc. at 1-800-656-3920 or visit us at www.consolidatedcredit.ca.