University Students and Debt: Learning Inside and Outside of the Classroom
While a university classroom can certainly be a good place to learn, it is true that many students will actually learn more outside of the classroom than they will listening to lectures and taking tests. The difference is just in the types of things that they will learn. In a class setting, they will be given a vast amount of important information. They will learn theories and ideas. They will enhance their minds. Outside of the classroom, though, they will learn about the real world, something that many of them have never fully experienced before.
From Family Life to University Life
The problem is just that students often come straight from families, where other people are always helping them and making things easier, to universities, where professors and advisors fulfill this same roll. They do have to do more on their own at a university, but they are not yet entirely independent. The school setting is somewhat insulated from real life. For example, student jobs are provided for them, maintenance on their dorms is done by someone else, and their parents may still handle their finances.
Learning Quickly
In the real world, they have to take care of all of this on their own. This contrast can be rather jarring for most students, really catching them off guard when they graduate and there is no one there to assist them. However, smart students will learn quickly by trying to expose themselves to these things and by asking advice before they graduate, which can help make the transition easier. For example, some students buy homes and rent them out while still taking classes; this teaches them about investing in properties and about the responsibilities of being a homeowner.
Testing Financial Paths
Another thing that students should do is to look into all of their financial options, even if their parents are paying for their room and board and sending them spending money. They do not want to flounder when this funding is cut off. For instance, they should get credit cards and learn how to use them responsibly. Even if they are just using them to buy snacks and school supplies, they can learn about short-term loans - which credit cards are really - paying their bills on time and building up their credit ratings.
If they have the responsibility of a credit card, they can also find out firsthand how important it is to have a plan and to stick to that plan at all times. Debt can quickly creep in with student credit cards without a plan, building on itself and growing more quickly than many people can believe. However, credit cards are never going to build up unwanted debt if the student understands his or her income level, the difference between necessary purchases and frivolous ones and when to stop charging things to the card. The theory behind this can be learned in a classroom, but the practical application has to be learned by getting a card and putting it to use.
Mistakes are Excellent Teachers
One thing that students will discover is that making small mistakes is sometimes the best thing that can happen. They will learn a lot in rapid fashion if they stray from their credit card plan build up too much debt and cannot pay it off at the end of the month. They will hate paying interest on what they still owe. However, having to pay the interest on a small amount of credit card excess is far better than making a mistake with a long-term loan, like a home mortgage, which could result in the loss of the home.
Students who take the time to learn both inside and outside of the classroom will be prepared for the real world after graduation. These students will be well-equipped to deal with all of life's challenges and obstacles.
Sources:
http://www.standard.net/stories/2012/12/27/credit-card-debt-can-harm-college-students
http://www.thinkarete.com/credit-card-debt-for-students/