 "Photo: Photo Illustration by Shaun Stewart")
Despite the fact that many students don't know what classes they will take next semester or what they will have for dinner tonight, senior finance lecturer Michael Brandl thinks students should start saving for retirement, he said.
"It may sound crazy, but the biggest thing students can do is to start saving for retirement," he said. "If you have a job, you can put money into a Roth individual retirement account for as little as $100, and just put in as little as a few dollars a week."
The Texas Legislature is debating bills that address rising tuition costs, which many reformers blame on tuition deregulation passed in the Legislature in 2003. Since deregulation, tuition at UT has only gone up by 102 percent, according to the Texas Higher Education Coordinating Board.
As many as two-thirds of four-year undergraduate students graduate with some debt, and with the average cost of attending UT between $4,000 and $15,000 per semester, many undergrads will need some assistance with tuition and living expenses, according to the Office of Student Financial Services Web site. This aid may come in the form of scholarships, grants, subsidized and unsubsidized loans.
Henry Urick, assistant director in the UT Office of Student Financial Services, said the average total debt accrued by UT students graduating in spring 2006 was just under $17,000. Congress recently approved increasing Pell grants, need-based grants for students with financial aid, for the first time in at least five years, so loan volume has increased, but grants have not kept up at the same level, Urick said.
"We try to give options and show students the most aid that they are eligible for, but we encourage them to only borrow what they need," he said.
Brandl likened getting out of debt to losing weight: It may sound simple, but takes lots of dedication and commitment. He also cautioned students away from accruing lots of credit card debt, which is as much or more of a culprit in contributing to student debt as loans.
"The reason people get themselves into trouble financially is because they don't control their spending," Brandl said. "The real problem is that people start basing their personal value on what they own."
Tanisha Warner, a spokeswoman for Money Management International, estimates that the majority of students experience financial stress as the result of a lack of budgeting skills.
"Of course students are also a big target market for credit card companies," Warner said. "Most debt consolidation loans are for people with assets, like a mortgage, so students will most likely not be eligible for these services."
Warner recommends understanding the differences between subsidized and unsubsidized loans for planning purposes. She explained that unsubsidized loans collect interest from the beginning, with a fixed interest rate, while subsidized loans start accumulating interest after you graduate or if you get behind on a payment.
It is possible to accrue both student loan and credit card debt and not lose complete control of one's finances. Kendra Newton, a journalism senior and member of the Texas Student Publications board, said she has taken out a few subsidized and unsubsidized loans and has also received about $4,000 in scholarship funds each semester of college.
"Right now, all I care about paying down is credit card debt," Newton said. "I did an internship in New York last summer and put it all on credit."
Newton said she also works three jobs, and tries to take out as few loans as possible.
"It's a great feeling that you can come out of college knowing that you'll have such a high credit score at such a young age," she said.
Humanities junior Monica Riese said she chose to live in a reasonably priced dorm room and tries to save money on daily expenses like groceries.
"My parents said they would cover anything and everything until I either graduated from undergrad or got married, whichever came first," she said. "I try to save the remainder of whatever is allotted from my parents in an account, so I'll get a higher rate of return to put toward paying for grad school."
Riese said she appreciates the fact that her parents can help with her expenses and understands that having no student loans is great for her financial situation.
"When I graduat,e I'll have just turned 21, and if I want to buy a house or make any other purchases outside of school, I'm pretty much on my own if my Dad has anything to do with it," she said.
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