College students often make financial decisions that can have consequences for years. Getting a student loan or credit cards can influence long-term financial success. Here are the ways to strengthen your decision-making skills:
- Do your research before applying for a student loan. If you have to borrow to pay for some or all of a college education, review the different types of student loans. Choose one that’s low-cost and has a flexible repayment terms, which will generally be a federal student loan.
- Understand the pros, cons and costs of debit and prepaid cards. Debit cards enable you to withdraw money from your checking accounts for purchases or cash. Prepaid cards are used to access money that has been loaded (added) onto the card, which is not connected to a bank account.
- Use credit cards responsibly: While credit cards are a convenient way to establish a credit history, they can make it easier to spend money. Purchases that cannot be paid in full by the due date will incur interest
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Teaching Suggestions
- Ask students if they have an outstanding student loan. Was the process of financing an education daunting and time consuming?
- Ask students to visit the College Affordability and Transparency Center website (collegecost.ed.gov) for choosing the financial aid package that best suits their needs.
Discussion Questions
- Why is it important that you find the most affordable education that fits your budget, future career, and long-term financial goals?
- What might be the benefits of understanding the pros, cons, and costs of debit and prepaid cards?
- Are school-affiliated cards the best deal for all students? Why or why not?
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