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Delaying Marriage, One Loan Payment at a Time

I now pronounce you in decades of debt.

Student loans have hit a record high of $1.2 trillion, putting a crimp in The American Dream of owning a home and starting a family. And it’s affecting the broader economy too.

“People cannot participate in the American dream because of student debt,” said Natalia Abrams, executive director and co-founder of

Cody Hounanian, 23, graduated from University of California, Los Angeles last year with about $30,000 in debt. He worked part-time at an In-N-Out Burger restaurant near campus throughout college and now works full-time as a manager at Whole Foods in his hometown of Santa Clarita, Calif. He is in the process of applying to law school.

He’s not married, doesn’t expect to be anytime soon and puts part of the blame on the burden of student debt.

“I’m sure there are people who say, ‘I don’t want to have a husband or a wife who is $100,000 in debt,’ but I think the real problem is more indirect. There’s almost not enough time to go out and start a family,” he said. “It’s an aspect that people forget. Planning and investing: forming relationships get in the way of that.”

“People cannot participate in the American dream because of student debt.”

“I don’t want to sound materialistic, but there’s a financial aspect,” he said. “In finding someone, there has to be a cash flow in order to take someone out.”

Abrams said that even people with decent-paying jobs are delaying that walk down the aisle because of debt. “If you owe $100,000 to $150,000 in student loans, you’re paying $1,000 to $1,500 a month. It’s cost-prohibitive,” she said.

“Everything from saving for a home to saving for retirement is completely off the table,” Abrams said.

Student debt isn’t the only reason young people are putting off marriage, of course. Women are putting significantly more time into earning advanced degrees. And jobs for less-educated Americans have withered, causing a longer search for a career that can provide a middle-class lifestyle.

Never Married

While there is no specific data on student debt-related delays to marriage, a recent study by the Pew Research Center shows that a record number of Americans have never married. The study found the median age at first marriage is now 27 for women and 29 for men. In 1960, the median age was 20 for women and 23 for men.

Student loan experts say indebtedness is weighing heavily in the young adults’ decisions to get married, buy homes, and save for retirement, however.

Heather Jarvis, an attorney in Wilmington, N.C., who specializes in student loans and student loan education, said she considered her student debt when getting married and merging finances with her husband.

“Getting married actually reduced the loan payment assistance benefits from my law school. My debt became more squarely on my shoulders upon marriage,” said Jarvis.

According to the Internal Revenue Service student loan interest deduction regulations, graduates may not claim tax deductions on their qualified student loans if they are married and file separately from their spouse. If a married couple chooses to file jointly for a student loan interest deduction, they cannot be claimed as dependents on someone else’s tax return.

Debt burdens “do limit students and graduates’ choices, influencing their timing,” she said.

Jarvis, who graduated from Duke University School of Law in 1998 with $125,000 in student debt, just recently finished repaying her private loans. She now has to pay off her federal loan debt from law school, which is about $30,000 – just above the current national average for undergraduate borrowers.

“People are delaying marriage, looking for more fulfilling partners, delaying childbearing. This demographic is people in their late 20’s, and most demographers would agree with that,” said Dr. Robert Bozick, a sociologist at the RAND Corporation in Santa Monica, Calif. Bozick published a study in June that found student loan repayment affected marriage timing for women, though less so in men.

As college tuition rises, Bozick said, it’s likely that “we are going to see more non-traditional lifestyles” than in generations past, emphasizing the “greater levels of debt.” He has found more young people have changed how they weigh whether or not they’re going to disrupt their careers for marriage, when in previous years, it was often the reverse.

Dr. Bozick himself earned his master’s degree from the University of Maryland, College Park, in 2001, and his doctorate from Johns Hopkins University in 2005. He has not yet finished repaying his student loans.

First published October 7 2014, 5:57 AM


How To Score A Private Student Loan

It’s no secret that college is phenomenally expensive, and the sticker price rises every year. In fact, college tuition has increased by nearly 1,200% over the past 35 years. For the 2013-2014 academic year, the College Board reports a “moderate” college budget averaged $22,826 for an in-state public college and $44,750 for a private college. The most expensive colleges cost more than $60,000 a year. Cha-ching!

Obviously, most families don’t have that kind of cash lying around, which is why the vast majority of students borrow money to help pay for college. For the most part, there are two types of student loans:

  1. Federal student loans funded by the U.S. government
  2. Private student loans from a non-federal lender, such as a bank, credit union or private lender

Federal student loans offer significant advantages, including fixed interest rates and income-based repayment plans – which means they are generally less expensive than private student loans. However, when it comes time to pay for college, many students who obtain federal student loans come up short.

When a federal student loan doesn’t cover the full cost of college and the student didn’t land a substantial scholarship, it’s time to search for a private loan.

Offered by banks and private lenders, private student loans generally come with variable interest rates between 3% and 12%, origination fees and other charges. These days, most private student loans mandate a cosigner, especially for younger students who haven’t established a credit history.

For these reasons, private student loans are often considered a last resort for families. Even so, with proper research, it is possible to find a competitive loan that meets the student’s needs.

Not sure where to begin with your private loan hunt? Here are a few tips:

A Lot Depends on Credit Scores

As you research student loans, pay close attention to interest rates. Unlike federal student-loan interest rates, which are the same for every borrower, the interest rates for private student loans vary. That’s because private loans are credit-based; students with better credit scores may receive a more favorable interest rate.

Students with a low credit score or no established credit history should apply with a credit-worthy co-signer, like Mom or Dad. Not only will this increase the chances of getting approved, but it could also significantly reduce the interest rate. Co-signers should be aware of the risk they are taking on, however. See Seniors: Before You Co-sign That Student Loan.

Check Out the APR

As you’re shopping around for the best deal, you may be tempted to choose the loan with the lowest interest rate. Don’t make this mistake. When it comes to private loans, it’s more effective to compare the Annual Percentage Rate (APR). Why? Because basic interest rates may not represent the true cost of the entire life of the loan. The APR factors in account deferment periods and repayment terms, which can have a huge impact on the overall cost of the loan.

To top it off, most lenders won’t give you an actual interest rate until after they have a chance to review your application. However, lenders typically provide APR examples up front, which can help you compare loans apples-to-apples. These APR examples also illustrate the lowest and highest interest rates available, which will give you an idea of what you can expect to pay. You’re likely to receive an interest rate that lands somewhere between those numbers.

Compare Payment Plans

It’s extremely important to find a lender that offers some flexibility when it comes to repaying your private loan. While some lenders require that you start making monthly payments while the student is still in school, others allow you to wait until after graduation. Pay close attention to these details and choose a lender that offers the ideal payment plan for you. For additional information on loan repayment, see Time To Consolidate Your Student Loans?

Study Up on Borrower Benefits

For bonus points, some student-loan lenders offer additional borrower benefits. These might include an automatic-payment interest-rate reduction (the interest rate drops for borrowers who sign up to have loan payments deducted automatically from their bank account), principal reduction or even cash rewards. For example, when you enroll in an automatic payment plan, most lenders will offer anywhere from a 0.25% to 0.50% interest rate reduction. This can translate into hundreds of dollars of savings over the life of the loan.

Be sure to read the fine print about these benefits. If borrowers can’t meet their end of the bargain (one month, they miss an auto-payment because their account balance is too low), they could lose the benefit permanently. Read more about the risks and rewards of these benefits here.

Reputation Rules

It’s important to choose a student loan lender that has a stellar reputation and offers first-class customer service. Professional and friendly customer service reps will be able to answer all of your complex questions and act as an ally when a borrower needs support and guidance in tough financial times. Not only can they walk students through their repayment options, but they can also help them avoid late payments.

To evaluate the customer service for each lender, ask the following questions:

Does it offer an online loan application?Does it provide toll-free 24/7 customer service with reasonable wait times?Does it have a website where borrowers can securely access loan information?Does it generate a lot of complaints from their borrowers?Is the lender recommended by schools and borrowers?Most colleges provide a preferred lender list, including contact information for reputable lenders with whom they’ve worked in the past. These recommended lenders usually offer the most competitive rates and superior customer service. Check out the school’s website or ask the college student aid office for a list. For more information, see Top Student Loan Providers and our tutorial on student loans. The website Simple Tuition will also enable you to compare loan options.

The Bottom Line

Families should try for federal student loans first. Private student loans are a last resort when federal loans and other funding (help from grandparents, perhaps) fall short. Research will allow you to compare private loan options and identify the best available deals.


Educating on payday loans/ short term loans | The Quick Loan Shop

Payday lenders have spread across the globe with their offers of short term, immediate loans, either helping those who are in dire need for the credit that banks refuse to offer, or feeding off of the poor and desperate, depending on who is looking at it and why. Most of the Payday controversy comes out of the UK, the USA, Australia, and South Africa. Across the pond a teacher from Reading, Ohio recently decided to take his students out on a field trip. His mission: to show these young adults that pitfalls of the dreaded Payday and Pawn shop industry. Packing 40 odd students into a bus, they set off to visit the world of quick cash.

Mr. Page is the economics teacher at one of the local high schools and as is faced daily with the struggle that his students go through to survive. Many have served prison sentence, some are already parents or have to work after school to help their families financially. Part of this teacher’s mission is to instill sound financial values in these kids; good saving habits, the need for a great credit rating.

The first stop is LoanMax, a short term lender where you can use your paid off car as surety. The students were informed that the interest rate for a short term loan would be 24.99% and that should the client default on even one payment, the car could be instantly repossessed.

Second stop is CheckSmart. The welcome is not very enthusiastic to say the least and when the students begin to ask about Payday lending and tax refund anticipation loans they are informed that the manager is not available to answer their questions.

Third stop is at CashAmerica. This establishment is bustling with activity. It is Friday and everyone is in to pay on their loans. There is an array of goods that have been used to pay off loans on sale. Here a friendly member of staff happily explains how things work at CashAmerica. She mentions that most of the repossessed goods on display are bargains worth looking at should one be shopping for hi-tech equipment, jewelry or other valuables. Interestingly it is here that the kids meet a somewhat ethical approach to the Payday loan industry. As they leave the establishment they are strongly urged to protect their credit scores.

Mr. Page is amazed, “I was taken by her honesty. She said that this is where you go when you’re in trouble, and she worked there! Everything in there had been taken from somebody.”

The day ends back at the school library where a representative a Credit Union as well as one of the local banks came to address the students. Finally the students fill out a work sheet with resources and information on the different Payday, Pawn, and Quick Loan options on the market today.

It is innovative teachers like Mr. Page who can really make a difference by educating the public on how to use these services, when to use these services, and how not to get into difficulty by taking out cash loans when one shouldn’t do so.

This entry was posted in Short term loans on September 22, 2014 by . […]

5 Questions to Help You Decide Whether to Save or Pay Off Debt

If you’re in the enviable position of having some extra cash in your bank account that hasn’t already been claimed by bills, then you might be asking yourself: Should I use the money to pay off debt, or simply save it? It’s a perennial question with a difficult answer, because it depends largely on the status of the rest of your financial life, as well as your expectations for the future.

With that in mind, we created the following five-step guide to help you think through what move is best for you and your money.

1. Do you already have an emergency savings account? We all need an emergency savings account at our disposal, even if we still have high-interest credit card debt to pay off. That’s because emergencies can happen at any time. We could suddenly need a root canal, a plane ticket home or washing machine repairs. We can’t necessarily count on credit cards and other sources of loans to be there when we need them, especially if we don’t already have a decent credit line in our name, so we need our own stash of cash for these types of emergencies.

[See: 10 Quirky Ways to Save Money .]

Funding emergencies ourselves through savings also avoids the danger of building up more debt and interest payments later. Financial advisors generally suggest that you should aim to have at least three months’ worth of expenses stored away.

Even if money is tight or you’re just out of school, putting a portion of your paycheck aside for a rainy day is a top priority and is even more important than paying off debt, at least at first. If you already have an emergency savings account ready to go, continue to the next question.

2. How much is your debt costing you? Many people don’t make this simple calculation, but it shows just how costly debt is. To do the math for your own debts, make a list of all your loans: auto loans, mortgage, credit card debt and anything else on the books. Next to each amount, write down the interest rate. (If you don’t know off the top of your head, look it up!) Multiply the two numbers, and that’s how much each loan is costing you per year. A $10,000 car loan at a 6 percent rate costs about $600 a year. Keep that number in mind as we move on to the next step.

3. How much would your savings earn you? If you do save this cash infusion, where would you put it? In a bank account that’s earning a 1 percent return or less? Or into a money market fund, which might pay you more (but also might not)? In the current market, it’s difficult to earn even 1 percent without taking on more risk. Pull out your notepad again and write down the total amount of cash in question, and multiply it by the rate of return that you could get on the money.

[U.S. News Quiz: Do You Know What to Do With Your Money?]

Now, take a moment to compare your findings from step two and step three. Would paying off a chunk of your debt save you more money than you could earn by saving the cash? If so, then you might be better off getting rid of the debt. That’s a valuable piece of information that will help you make the final decision.

4. What are your expected earnings in the near future? If you expect to receive an additional windfall in the near future, in the form of a payday check, gift from parents, tax refund or any other income boost, then you have a little more flexibility because you’ll have more money to work with soon, and perhaps you can pay off debt as well as save.

5. What are your financial goals? If you have big plans that require a lot of cash, such as starting a small business, buying a house or traveling around the world, you probably want to pad your savings account so it contains more than just an emergency fund. Of course, paying off debt can also be helpful because then you can embark on these new financial adventures without the added weight of old loans. But you still need cash to make those big goals happen.

[See: 10 Things Everyone Should Know About Money .]

The final answer will depend on how you answered the questions above, and it might involve a mix of spending, saving and paying off debt.

FinanceBanking & Budgetingcredit card debt […]

The Risks of Taking a 401(k) Loan

Most 401(k) plans allow participants to take a loan from their account, and many workers do. An average of 13,000 401(k) participants take a loan each month for a median of about $4,600, according to an analysis of 900,000 401(k) participants by the University of Pennsylvania’s Pension Research Council. About 10 percent of borrowers default on their 401(k) loans, typically due to an unanticipated job change. These loans are also subject to limits, fees and penalties. Here’s what to watch out for when taking out a 401(k) loan:

[See: 10 401(k) Facts Everyone Should Know.]

Borrower limits. Participants in 401(k) plans are eligible to borrow up to 50 percent of their vested account balance (up to $50,000 if their plan permits loans). That means you’ll need to have at least $100,000 in the plan to borrow $50,000. If your account balance is $40,000, the most you can borrow is $20,000. And the loan amount may be further reduced if you took another 401(k) loan in the past year.

Short repayment period. Typically, loans from 401(k) accounts must be repaid within five years. However, if the loan is used to purchase a home, the repayment period can be extended. Regular loan repayments must be made at least quarterly over the period of the loan. However, repayments can be suspended for employees performing military service. Payments can also be delayed during a leave of absence of up to a year, but higher payments or a lump sum will be due upon your return and the original five-year term of the loan still applies.

Penalties for missed payments. A loan that is not paid back in regular payments within five years is treated as a distribution from the plan. This means the entire outstanding balance of the loan becomes subject to income tax. For workers under age 59½, a 10 percent early withdrawal penalty will also be applied to the loan balance. Missed loan payments can often be prevented by having the money automatically withheld from your paycheck.

[See: 10 Trendy 401(k) Plan Perks.]

Leaving your job. If you lose your job or find a new job at another company, the outstanding loan balance may become due. If you are unable to repay the loan, the loan becomes a distribution and taxes and penalties may be applied to it. “You may have another opportunity you want to go to, and your loan may limit that activity,” says Eric Toya, a certified financial planner and director of wealth management at Navigoe in Redondo Beach, California. “Or you may lose your job, and then not only have you lost your job, but this loan turned into a withdrawal that you owe a whole bunch of taxes on.” Another way to avoid the tax consequences if you have the cash is to deposit the outstanding loan balance in an individual retirement account or other retirement plan within 60 days.

The opportunity cost. When you take a loan from your retirement account, you miss market gains you could have benefited from if you left your money in the account. “If you have a $100,000 401(k) and you borrow $25,000, you basically have $75,000 participating in the market,” Toya says. “If the market goes up 10 percent, then you are gaining $7,500 versus $10,000. If the market goes down, you could say you saved money, but then when the market goes down, it is generally a great time to be adding money to the portfolio. And that is generally not happening when people are taking 401(k) loans.”

Loan expenses. The interest you pay back to yourself isn’t the only cost of a 401(k) loan. Participants in 401(k)s who take out loans must often pay origination, administration and maintenance fees.

Double taxation. Traditional 401(k) contributions are made with pretax dollars, and the money is not taxed until you withdraw it from the account. But loan repayments of both principal and interest are made with after-tax dollars. “This results in double taxation of the interest piece, since when you retire, you’ll need to pay tax on the full benefit from the plan, a portion of which is due to this after-tax interest you paid for the loan,” says Olivia Mitchell, director of the Boettner Center on Pensions and Retirement Research at the University of Pennsylvania’s Wharton School and co-author of the Pension Research Council report. “In most cases, the opportunity cost of plan borrowing plus the double taxation of the interest from a plan loan will still be less than, say, borrowing on a credit card or payday loan.”

[Read: 10 Ways to Reduce Taxes on Your Retirement Savings.]

Less retirement savings. A 401(k) loan ultimately reduces the amount of money you will have in retirement. “The need to borrow from a 401(k) plan is usually a symptom of a deeper problem with a person’s financial situation,” says Michael Garber, a certified financial planner for Michael Garber Financial Planning in Sunnyvale, California. “Before considering taking a 401(k) loan, take a look in the mirror and see if there are changes you can make first to better enable living within your means.”

If you absolutely need the money, you could compare the fees and interest rate on a 401(k) loan with loans from other financial institutions you qualify for. Borrowing from your 401(k) will certainly hurt your retirement account’s growth and reduce the amount of money you have at retirement, but the terms might be better than other higher-cost forms of debt, assuming you can hold onto your job until the loan is paid off. “Most people cannot borrow at interest rates as low as they can usually get from their 401(k) plans,” Mitchell says. “Of course, if the borrower ends up not repaying the loan due to job termination and then pays a fine, the full cost can be much higher.”

Emily Brandon is the senior editor for Retirement at U.S. News. You can contact her on Twitter @aiming2retire, circle her on Google+ or email her at

FinanceLoans […]

Report: 128K people took out 1M payday loans in SC

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Senate Approves Bill Aimed At Payday Lending « CBS Minnesota

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Cash U.S. Home Purchases Surging as Rates Rise: Mortgages

Greg Leffel, an investor in Columbus, Ohio, said he relishes cash deals as much as he dislikes home loans. He has spent $150,000 buying and renovating 10 foreclosed houses in the past two years and turned them into rentals.

“Lending is so tight, and even if you do get a loan you’d have to jump through a bunch of hoops first,” Leffel, 44, said. “I like buying with cash, because then I can control my investments.”

Investors like Leffel helped spur all-cash home purchases to a record 43 percent of U.S. deals in the first quarter, more than double the share a year ago, according to data firm RealtyTrac Inc. Cash is keeping residential sales trudging along while mortgage lending plummets, hurt by rising interest rates and stiff credit requirements. Americans seeking a loan to purchase their first dwelling are increasingly shut out.

“The cash buyers today mean that all is not well in the housing market,” said Clifford Rossi, finance professor at the University of Maryland’s Robert H. Smith School of Business. “First-time home buyers should make up 40 percent and we’re not seeing it because of mortgage rules.”

U.S. lenders are cutting jobs as business contracts. They made $226 billion in mortgages in the first quarter, a 17-year low, according to the Mortgage Bankers Association in Washington.

Small Investors

Smaller investors, who deploy cash for homes to rent, flip, or vacation in, are finding better deals now that institutions have pared buying foreclosures, said RealtyTrac Vice President Daren Blomquist. Cash sales are rising from coast to coast, comprising more than half of all purchases in many metropolitan areas in the first quarter.

In the Miami area, 67.1 percent of sales were cash deals; New York posted 57 percent; Detroit recorded 53.5 percent; Atlanta had 53.2 percent, and Las Vegas posted 52.2 percent, according to Irvine, California-based RealtyTrac.

In Manhattan, buyers are using cash for trophy apartments and to gain an advantage over borrowers who must depend on loans to finance a purchase. Pej Barlavi, owner of brokerage Barlavi Realty LLC in Manhattan, said three of his five current clients buying homes prevailed with all-cash offers.

Barlavi said two of them are hedge fund managers who used year-end bonuses to buy the properties: a $2.2 million two-bedroom apartment in Midtown, selling for $150,000 above the asking price; and $1.5 million for a one-bedroom in Tribeca. His client in the second transaction was “nudged higher by a foreign buyer” before being chosen by the seller, Barlavi said.

Foreign Buyers

“In Manhattan, you have foreign buyers coming in and using properties as a second, third, fourth or fifth home and hedging risks in their home countries,” said Chris Mayer, a real estate professor at Columbia University Business School in New York.

Private-equity firms, hedge funds and other institutional investors have spent more than $20 billion to buy as many as 200,000 rental homes in the last two years. They snapped up properties after prices fell as much as 35 percent from the 2006 peak and rental demand rose from the almost 5 million owners who went through foreclosure since 2008.

New York-based Blackstone Group LP (BX), the biggest U.S. single-family home landlord, cut purchases by 70 percent from last year’s peak and is now concentrating on just five markets, Jonathan Gray, global head of real estate, said in a March interview. Blackstone has invested $8.5 billion since April 2012 to amass almost 44,000 rentals in 14 cities.

Strict Credit

American Homes 4 Rent (AMH) and Colony American Homes, the second- and third-ranked U.S. home landlords, have also cut acquisitions as the rebound in prices requires them to raise capital or improve operations.

“As institutional investors pull back their purchasing in many markets across the country, there is still strong demand from other cash buyers, including individual investors, second-home buyers and even owner-occupant buyers,” RealtyTrac’s Blomquist said.

Banks’ stricter credit standards following the housing crash, in combination with rising mortgage rates, have put the brakes on lending. More than 40 percent of borrowers had FICO scores above 760 in 2013 compared with about 25 percent in 2001, according to Goldman Sachs Group Inc. analysts in a Feb. 20 report. The 4.22 percent average rate for a 30-year fixed mortgage on May 6 rose from 3.53 percent a year ago, following the Federal Reserve’s announced plan to taper its bond buying, according to

Wells Fargo (WFC)

“The increase in all-cash purchases is partly because rates are higher than they were a year ago, so it’s made buying with a mortgage more expensive on top of home price increases,” said Jed Kolko, chief economist at real-estate information service Trulia Inc. in San Francisco.

At Wells Fargo & Co., the biggest U.S. mortgage provider, home-loan originations plunged to $36 billion in the first quarter after surpassing $100 billion for seven straight quarters ending in June 2013, according to the San Francisco-based bank. Second-ranked JPMorgan Chase & Co.’s $17 billion total in the first quarter fell below the trough in originations made during the housing crash.

First-time buyers in particular are struggling to get home loans. They comprised 30 percent of total existing-home sales in March compared with an average of 35 percent since October 2008, according to the National Association of Realtors.

Without these buyers, existing-home sales are declining. They fell 7.5 percent in March to a seasonally adjusted annual rate of 4.59 million compared with a year earlier, according to NAR. The sales volume in March remained the lowest since July 2012, according to the trade group.

“With fewer first-time buyers, you end up with more all-cash buyers and less trading up in home activity,” said Columbia’s Mayer. “To get that ecosystem working, you need to have first-time homebuyers so the trade-up purchasers can buy bigger homes.”

To contact the reporters on this story: Dan Levy in San Francisco at; Alexis Leondis in New York at

To contact the editors responsible for this story: Vincent Bielski at; Kara Wetzel at Rob Urban


Graduates Could Potentially Lean On Payday Loan Lenders …

Statistics have shown that young spenders are increasing their frequency visiting online payday loan lenders. Young money, represented by those who are just getting started in the work force, is looking for relief with payday loan lenders. According to a PEW study, women between the ages of 25-44 are more apt to use payday loan lenders as a way to keep monthly budgeted expenses running properly. Could post-graduates be a part of the future statistics?

As the costs for higher education continue to increase and student financial aid dwindle, the concern of graduates needing financial assistance after graduation is alarming many. It is a fact that the starting salary for a college graduate is normally higher than without. The changes in Stanford loans may hurt more of these graduates. What used to be forgiveness for interest with qualified subsidized federal help is now becoming the responsibility of the young money earner. Six months after graduation, a college student is expected to start paying off some of the biggest debt facing a young person. The economy and high unemployment rate facing these young graduates are keeping many of them at home or struggling to get started.

Students are being warned about credit cards. Even though the accessibility of cards for students has increased over the years, those carrying debt are going to have a tough time making ends meet once in the “real world”. Cuts in student aid have left more students not qualifying. Credit cards are providing relief to many from school supplies to living expenses. Parents are struggling themselves with their own finances so many college students are turning to creditors for assistance. Those who continue education into graduate school face even larger amounts of debt.

Many students carry their school work load along with part time jobs. Efforts are being made to help pay for costs. The cost of dorm life has many more students looking into apartments and even home rentals.

If choosing to not use payday loan lenders or credit cards, what choices to students have?

*Go to family. Normally this option is frowned upon, but anyone just starting out is an exception to that rule. This is usually applied to those who have already created bad credit for themselves which can negatively affect relationships if the loans go sour. A family member is a great person to ask to be a co-signer with a bank or a rental lease.

*Make a budget with prioritized payments. Student loan payments and any bill which has a co-signer must be set as priority.

*Start saving. Even if it is just $25 per pay period, this amount is just a starting point. You will appreciate having a few extra hundred dollars when emergency cash is needed. This is your first step in keeping yourself away from using payday loan lenders or credit cards.

*Be realistic towards any purchase. Separate needs from wants and keep away from third party money until you have the income to support the purchases after budgeted costs are separated.

*When you do need third party money, choose a lender or creditor which best fits your situation. Look at both long-term and short-term situations and make good choices.

Those entering the workforce will experience some on the job lessons with handling finances, but the more education you have on the subject could better prepare you from falling into too much debt.


Bradford pupils learn lessons about loan sharks

Bradford pupils learn lessons about loan sharks

Children at Woodside Academy in Bradford who have been learning lessons about borrowing from loan sharks

The dangers of borrowing cash from loan sharks are now being taught at Bradford primary schools.

Woodside Academy is the first to work with the England Illegal Money Lending Team to ensure children understand the consequences of using illegal money lenders.

Despite their early age, pupils are being taught about borrowing money safely and managing money effectively.

Education packs have been developed to fit into many areas of the school curriculum including maths, English, art and design, drama and citizenship.

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COMMENT: Lessons in dealing with loan sharks

They are based on real-life situations and are designed to explore a range of issues, including spending money, safer lending and borrowing, the dangers and potentially horrendous consequences of using loan sharks and how to choose more alternatives and make better financial decisions.

And the hope is children will become financially savvy and avoid getting into difficult situations in later life.

The scheme is part of a community project called Smart Life which is taking place in the Royds ward in Bradford.

Woodside pupils have also been working with a professional theatre company, Altru, taking part in a ‘Play in a Day’ – funded by the the Illegal Money Lending Team – to help drive the messages home.

Head teacher Jane Browne said some pupils’ families had first-hand experiences of the consequences of borrowing money from loan sharks and the school had decided to use its annual money week activities to focus on the dangers.

“It is part of what we do as an academy to prepare our children for their future lives,” she said.

The Illegal Money Lending Team works in partnership with Trading Standards services across England to prosecute loan sharks and to support the people and communities that are affected by them.

David Lodge, head of West Yorkshire Trading Standards said: “This is a brilliant way to get children engaged in the serious subject of loan sharks.

“Educating pupils in a fun and interactive way while warning them of the dangers of dealing with illegal money lenders that blight our local communities at a young age, will better prepare them for adulthood”.

Bradford Councillor Val Slater, who is chairman of the West Yorkshire Trading Standards Committee, praised the educational packs which have been produced by the Illegal Money Lending Team.

“They have been created by schools and teachers who understand the need to educate young people about money and safe saving for the future,” she said.

“The young people will carry the message home and encourage parents, who may be in difficulties, to seek help and support”.

In 2012, the Telegraph & Argus reported how parents picking their children up at one Bradford school were being threatened by loan sharks’ ‘heavies’.

The head teacher told how she had to intervene when a thug with a bull terrier harrassed a distraught young mother for cash as she picked up her child.

Similar problems had also been reported at other schools and led to head teachers holding meetings to devise ways of tackling them.

Anyone with information about loan shark activities in their community has been urged to contact the Illegal Money Lending Team helpline on 0300 555 2222.

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