A column by Margaret H. Johnson. As featured on MyTelus.com and Shaw: Finance.
Margaret H. Johnson ACE, RQIC, has over 35 years of financial industry experience in both lending and collecting. She is an Accredited Insolvency Counsellor, Registered by Industry Canada.
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To loan or not to loan
Financial barriers are among the most common reason that young people do not continue on with their studies. As millions of students start classes next week, many of them in post secondary education will be given applications for credit cards in the form of what is known in the credit industry as the “Grad Kit”. The Grad Kit is a very valuable tool if you are a credit card company – just imagine, thousands of new potential customers in one place at one time. Some of these new customers will become customers for life. My Daughter is starting college this September and last week she returned home with 5 applications for credit cards. Her College, as part of the registration process, had given the applications to her. What are they doing to our kids? The marketing of these cards is being done by the people that are there to educate her but with these card applications came no education, just offers like “$1000 rebate to put toward her student loan” (She does not have a student loan). The next makes an offer of “freedom of choice”, “save 10% and get free shipping”. Another one proudly states “How to get an A in Credit (for the rest of your life)”. The question is why would you want an A in credit for the rest of your life if you do not need credit? So if you are a student, beware – look at all your options before borrowing any money. If you do need to borrow, get the best deal on interest that you can and pay it off as fast as you can. First – Create a Budget
Remember all student loans need to be paid back and student loans will affect your credit rating. The average debt load for a graduating student in a 4 year program in 1999 was $25,000 – the cost of repaying that loan at 10% interest over 10 years is $14,645 – for a total of $39,645 – that is almost what I paid to purchase my first house. Your education is extremely expensive - make sure to think very carefully before you borrow any money – it makes good sense to try and cut back on expenses rather than take out a loan. Helpful websites:
Student Awards and Scholarships – http://www.studentawards.com/ Next week more on Student Loans. Remember, if you are experiencing financial difficulties do not wait. Speak to a professional today. Do you have a story that
you would like to share about your experience with a debt
collector? Email me -
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Margaret H. Johnson ACE. RQIC is president of Solutions Credit Counselling Service Inc. and Women and Money Inc. She can be reached by e-mail at
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© Solutions Credit Counselling Service Inc.
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