Money tips for recent college graduates

More than ever, recent college graduates need sound advice to help them establish a sound financial footing in an economy where jobs are scarce and student loan bills are looming.

Most government loans offer a six-month grace period before graduates must begin making payments, but the loans cannot be wiped out even if bankruptcy is declared. As a result, facing the reality of what the monthly payments will be and finding a job, even if the work is less than ideal, should be a top priority.

When the bills come due, loan consolidation is an option for some graduates. Interest rates will reset in July, and they are expected to decrease. Comparably low interest rates may be one of of the only bright spots on the horizon for young people finishing school in the current economy.

Another option for graduates in a limited number of fields is loan forgiveness. Although these programs are on the decline in some states due to budgeting concerns, professionals in fields such as teaching, nursing, and engineering are sometimes eligible for loan forgiveness after working for a designated number of years.

Money tips for college grads? Here are a few suggestions:

Be a saver
Most experts in the financial arena suggest keeping at least three months of living expenses in the bank as back up.

Ditch the debt
The average college graduate is overwhelmed with more than $4,000 in credit card debt. Pay off the credit card with the highest interest rate first.

Get a credit card
Are you one of the few college grads without a credit card? Graduation may be the time to take the plunge. Make sure you pay off the balance each month to build your credit rating.

Get smart
It's amazing how little college grads know about their finances. Get educated on money matters and pick up a book like "I Will Teach You to Be Rich" for the lowdown.

Click here for additional tips for college grads.

College tuition costs on the rise this fall

Parents with college-bound kids may get a Halloween-inspired spook that will leave their hair standing on end. Tuition is climbing faster than financial aid. Now, that's scary.

According to a report released by the College Board on Tuesday, Oct. 20, tuition and fees to private four-year universities rose 4.4 percent to $26,273 while charges to public four-year universities spiked 6 percent for both in-state and out-of-state students.

In contrast, financial aid isn't keeping up with the spike. Grant money only grew 4.7 percent during the 2008-2009 academic year.

Over the past decade, college costs increased on average by 4.9 percent at public colleges and 2.6 percent at private universities. The survey suggests that the swell in fees is a direct result of the economic downturn with private school endowments plummeting and state funding for public schools dropping 5.7 percent per student this year.

"Every sector of the American economy is under stress and higher education is no exception," says Terry Hartle, senior vice president of the American Council on Education. "It's regrettable, and it's yet another piece of disappointing economic news that affects families.”

Click here for the lowdown.

Relief for those struggling with student loans

Many people who decide to pursue higher education end up paying the price for years. Without scholarships or other assistance, just one year at a private institution can cost upwards of $50,000. The only option many students have is to take out large loans.

Effective July 1, however, a new plan will allow lower income graduates to make smaller monthly payments.

This relief comes in addition to a plan the government already offers to forgive some of the debt of students who pursue public service career paths. After a graduate makes 120 payments, the remainder of the loan is forgiven. The only loans that are eligible for forgiveness, however, are the Federal Direct Stafford Loan, the PLUS loan, the graduate PLUS, or the Federal Direct Consolidation loan.

"Typically, it is projected that a borrower who performs public service under this program will repay only about one-fourth to one-half as much money as a borrower who does not," Peter Mazareas, vice chairman of the College Savings Foundation, a Washington-based advocacy association, says to The Boston Globe.

Some loan forgiveness programs are also based on the state in which the graduate lives, and Massachusetts, for example, offers additional programs. For graduates who pursue professions related to teaching young children or other forms of childcare, there are forgiveness opportunities available.

In addition, the federal government has discussed increasing its involvement in helping graduates handle the burden of student loan debt. Loan forgiveness or assistance could become available to those pursuing a wider range of professions. For more information on Massachusetts loan forgiveness, click here.

--Bridget O'Sullivan

Financial crisis impacts college campuses

Buckle up, it may be a bumpy ride for college kids next year.

With the chaos of the country's financial crisis and slumped economy, the turmoil on Wall Street as well as the growing concern among the general public has begun stirring up a sense of fear among universities and state colleges.

University administrators and officials have begun holding meetings about halting the costs on any new plans of constructions or projects on college campuses and have started to keep a close watch on all the funds that are used.

"Everything is on the table in this context," says Brandeis University's spokesman, Dennis Nealon, to the Boston Globe. "Colleges and universities can't pretend this isn't going to have an effect on us," he adds.

The condition in the state of Massachusetts especially is quite critical as a large portion of the state's high income is attained from funds generated by universities established for higher learning. The funds incorporated into the state's economy by various independent universities amounts to a staggering $23 billion annually.

The president of one of New York's economic consulting firms, Hugh O'Neill stated that universities and colleges have been the sole reason for stability in Massachusetts and this crucial time of economic instability.

Due to the fallen market conditions, the universities have been left struggling for more funds. Thus there might be the strong possibility of colleges raising the tuition amount for their students as there is going to be a significant cut in government subsidies to state colleges and other academic institutions.

"Depending on their severity, there could be fee increases for the second semester," says Robert Antonucci, president of Fitchburg State College.

These cost increments could affect a number of private universities, as their already expensive tuition bills might discourage the already financially troubled middle class families from enrolling their children in them, thus significantly reducing the college going population.

People are saying everything will be OK once things return to normal," states Paula Rooney, of Dean College in Franklin. "But what's the definition of normal right now? I think it's an assumption we have to give up."

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