When it comes to finances, Allea Grummert is like a lot of college students. She works varying hours at multiple jobs and income isn't always predictable. The University of Nebraska-Lincoln senior's expenses come in significant chunks, like a semester's worth of tuition and books and a looming security deposit for an off-campus apartment.
Allea's experience managing money is limited. She's not a finance or accounting major, and there's not a required high school or college course called “Budgeting and Personal Finance 101.”
Early in January, Grummert got to the point where she needed a little help putting together a budget. She's planning to study abroad in London and needs to save money for her trip. So Grummert made an appointment at the university's new Student Money Management Center. The school-funded operation offers one-on-one advising sessions and holds personal finance events to help students get on the right path with their finances.
“Since I'm planning to study abroad, I wanted to get my ducks in a row for that,” Grummert said. “And it's good to get in the habit of knowing where your money goes.”
With tuition rates and student debt levels on the rise across the country and in the Midlands, more area colleges and universities in recent years have moved to create financial education operations that help students grappling with money issues. UNL and Creighton University opened personal finance operations in the past 12 months. Others have been around longer; Iowa State University's Financial Counseling clinic opened in 2004.
Some universities, however, don't have independent centers that focus solely on personal finance. The University of Nebraska at Omaha, Iowa Western Community College and most other colleges in Nebraska and western Iowa have only financial aid offices and counselors. They are available to help complete complicated loan and grant forms, not to figure out why students can't afford rent or books.
The goal of the UNL center is simple: help teach students the personal finance lessons they didn't get from their parents or from their pre-college education. Budgeting. Managing credit cards. Living within your means. The basics.
“It's surprising how many students don't know what a budget is,” said Erin Wirth, a recent UNL graduate in marketing who was plucked by university officials to lead and promote the Money Management Center.
“I think the education starts as home. I don't think parents understand the importance of teaching their kids the basic financial skills that you need.”
A number of students have come seeking help, Wirth said, after parents cut them off financially because of hard times back home.
Another individual, an international student majoring in engineering, came in for advice on what to do with his credit card debt. He had racked up $10,000 in charges, then paid it down to $3,000. But soon after graduation this year, he will return to his home country, where wages are lower and the remaining credit card balance is going to be harder to pay off.
One woman, a humanities student, had $30,000 in student loans and could not figure out what she was spending money on.
UNL's vice chancellor for student affairs, Juan Franco, said he wants the center promoted to every class of incoming freshman and their parents.
He especially wants to focus on the risks of racking up credit card debt.
“That's the big one, credit cards and students going into debt,” Franco said. “We want to make sure students are aware of what they're doing.”
According to the most recent statistics from student loan giant Sallie Mae, about 76 percent of undergraduate students have credit cards and graduate with average credit card debt of $3,173, a record high.
About 21 percent of students included in the statistics had credit card balances between $3,000 and $7,000.
Rising tuition rates and student loan debt also are leading issues.
On average, about 64 percent of Nebraska college students graduated in 2009 with $22,361 in loan debt. That's about $6,500 less than in Iowa, where 74 percent of college graduates averaged $28,883 in student loans, according to the Project on Student Debt.
The figures are all higher than the previous year.
Franco said the idea for the Money Management Center came from UNL's student government “a number of years ago” when tuition rates were going up.
Officials, Franco said, supported the idea largely because of the recession and the impact it had on students and parents.
“The bad economy has impacted all of us, directly or indirectly,” Franco said. “People realize that in bad economic times, people that are doing financially well, all of a sudden, could not be doing as well. You have to be prepared for that.”
At Creighton, Dean Obenauer, an accredited financial counselor who previously worked in financial aid, spearheads the university's Financial Literacy offering. Its footprint is small, he said, but “students are coming around.”
Since July 2010, Obenauer has been “branching out,” marketing the Financial Literacy program. He regularly gives presentations to groups or clubs and has focused on building a website with educational content.
Similar to UNL's center, Creighton students can make appointments with Obenauer to set up budgets or talk personal finance. But not many students have taken advantage of that, Obenauer said.
In the UNL program's first semester, Wirth, Emily Burr, a student and part-time program assistant, and Kathleen Prochaska-Cue, an accredited financial counselor, met with 60 students. Wirth hopes to have individual advising sessions with at least 20 students per month in the future.
That number could grow even higher if current trends continue. According to a survey from the University of California-Los Angeles, students that started college in 2010 were more stressed and had “major” financial concerns about financing their education. And 53 percent of the 201,818 respondents reported using loans to help finance their education, an increase from the previous year.
Grummert, the UNL senior, is certainly less stressed after her consultation at the Money Management Center.
Instead of trying to save up for her entire trip to London, she's going to do it in chunks. Reasonable goals.
First, her visa. Then airfare. And finally the rest of her travel expenses.
The double major in marketing and history said she's on the right path. She also found out those regular trips to Starbucks really add up after a while.
“The session was wonderfully helpful,” Grummert said. “I just needed some things in layman's terms.”
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