Keeping money in mind when starting school

Friday, August 3, 2007 | 12:00 a.m. CDT; updated 6:39 p.m. CDT, Sunday, July 20, 2008

COLUMBIA-Great news, college students: There are plenty of companies willing to give you thousands of dollars to buy whatever you want.

The bad news: There are plenty of companies willing to give you thousands of dollars to buy whatever you want.


OK, so college was a bit more costly than you originally planned. There are times when students may have to get a loan, but what’s the best way to go about it? Mark Oleson, from MU’s Office for Financial Success, offers a few suggestions: 1. Check with the feds. The federal government is the first place students should check for student loans, after they’ve exhausted “free” sources: scholarships, grants and the like. “Even the worst federal choice is better than the majority of bank options,” Oleson said. And don’t forget to file your FAFSA, even if you think you aren’t eligible. There are still unsubsidized federal loans available for students that aren’t based on your parents financial situation. 2. Check with your parents. Your parents’ credit is older, wiser and more established and may be eligible for loans you can’t get, or at least for loans with better terms. The government offers Parent Plus loans that your parents can take out for your education costs with relatively low interest rates. And if push comes to shove, there are always home equity loans. 3. Check with the banks. This is a final option and only if all other options have come up short. Make sure you shop around when looking for a loan, because different banks offer different types of loans. Shop for a private student loan the same way you would for a credit card. But, Oleson offers one warning: “If you have bad credit, there’s no such thing as a good loan.” For more information, go to the Office for Financial Success’ Web site at or the Tigers Credit Union Web site at

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While students are preparing to head off to college campuses, credit card companies and lending institutions are preparing to follow them. It’s no big secret that credit companies love college students. And what’s not to love? Large populations of young people, most whom are living on their own for the first time, with little to no credit experience; people who most likely have a deep desire for money.

Now, let’s not jump to the conclusion that credit companies are inherently evil. The CEOs of these companies aren’t sitting around in swank, corporate boardrooms plotting the downfall of an entire generation’s credit history.

Those companies, however, deeply desire money. And considering some of their methods, there is cause to be wary.

Last semester, a credit company set up a booth at MU’s Lowry Mall, offering a free pizza to anyone who signed up for a card. Go to Citi Bank’s Web site and you can find a credit card for students that offers exclusive MTV rewards, including tickets to mtvU’s Spring Break and MTV’s Music Video Awards. These aren’t your parents’ perks.

So, what can students do to protect themselves?

“Come in with your eyes open,” said Mark Oleson, director of MU’s Office for Financial Success. Students need to be aware of the investment they are making in their college education. Many fall into the idea that there is no risk when it comes to purchasing an education.

But, he says, anytime you invest in something, there’s a risk. A student who is majoring in child development, who will likely be taking a job that averages about $20,000 a year, cannot afford to borrow $90,000 worth of student loans.

Education is the best way to tackle most money situations. Make sure you understand the reasons and the costs of taking out a loan or opening a new credit card account. Students should also keep track of their spending and savings habits as a way to avoid unnecessary overdraft fees.

“I’m a big proponent of a check register,” Oleson said. “A lot of students believe that if they don’t have money, they don’t need to budget. But, if you have no money, that makes having a budget all the more critical.”

If you’re coming to Columbia from out of town, you may be in the market for a new bank, one closer to campus. There are two places on campus where students can open new accounts: UMB Bank and Tigers Credit Union, both in Brady Commons.

While many students may know what a bank is, they may not know much about credit unions. A credit union is a not-for-profit institution in which account holders are not customers, but rather part-owners of the institution.

“If we generate any profit from our membership, it goes back to the members,” said Christos Cossyphas, president and CEO of Tigers Credit Union. “Anytime you have a ownership’s stake in something, you’re better off.”

Tigers is part of a larger network, called the CO-OP network, which provides account holders access to the credit union’s branches and more than 25,000 ATMs. They also offer free checking, free Internet bill pay and free transactions at any of the CO-OP’s ATMs. Its savings accounts offer higher interest rates than traditional banks, and it provides information on how to manage credit.

According to Cossyphas, there are more credit unions than banks in the country, but the reason that people don’t hear much about them is because most are smaller than banks and their field of membership is limited to certain segments of the population. In the case of Tigers Credit Union, they currently only serve students, alumni and family members of MU, Stephens College and Columbia College.

For students who may be unsure of how to handle their money, there’s help. The Office for Financial Success, located in 61 Stanley Hall at MU, provides free, individual counseling services to students. The office also offers two classes on financial survival: one directed to incoming students on budgeting and surviving while in school and another designed for graduating students on how to deal with their debt once they leave, as well as other financial life changes, such as 401(k)s and insurance.

So, how do you know when you need help? Creditors don’t have to call you on a daily basis or show up at your front door before you realize that you may need financial advice. Oleson said that when financial concerns start affecting other aspects of a student’s life, such as schoolwork and relationships, they should seek help. Another bad sign is when solicitors are aware of how desperate you may be and start coming to you with offers of credit.

Credit companies don’t have to go looking for customers, and as Oleson put it, “If I got someone contacting me, I’m in trouble.”

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