By Bethany Park
bethany@newsroom.byu.edu
Learning how to manage personal finances is one lesson learned in college, but most learn it through mistakes rather than in class.
A lot of students are inexperienced in using their money, Darron Allred, financial counselor for the BYU financial aid office said.
For undergraduate students nearly 10 percent carry a credit card balance of $3,000 to $7,000 and one in five have four or more credit cards, according to Nellie Mae, national federal education loan provider.
But loans can benefit if they are used wisely, said Bryan Sudweeks, BYU associate professor in finance.
An education is an investment that will pay off when the job obtained pays three times as much as a job gained with a high school education, Sudweeks said.
President Gordon B. Hinckley, president of the Church of Jesus Christ of Latter Day Saints, has counseled that an education is one of the few things worth going into debt for.
Still loans come with a high price.
On average a school loan takes 10 years to pay off. This is if the minimum payments of $20 to $50 per month are made, said Erika Matson, loan officer for Utah Community Credit Union.
Credit is no different.
Money from credit cards is not free. It takes 93 months to pay off an outstanding credit card balance, if payments are 2 percent of that balance, with 18 percent interest, Sudweeks said.
Credit Card debt is an increasing problem for college students. Credit card companies understand that in many instances parents will cover unpaid debts for their children, even those in college and living on their own. Banks also make the majority of their money from credit card interest and fees, Allred said.
For years it has been BYU policy to not allow any credit card marketers or fliers for credit cards on campus. 'Anytime the university allows marketers on campus many people imply that BYU endorses them. We don't want people to think we endorse credit cards,' said David Lucero, assistant director for student leadership.
Students that are in financial trouble can find help through the financial aid office on campus.
Nonprofit organizations are also available to provide financial education and confidential debt management. Some can be found on the Internet at myvesta.org, www.genus.org (Genus Credit Management), and www.nfcc.org (National Foundation for Credit Counseling).