For college students, getting smarter about money renders lifelong benefits

Logan Fletcher is $16,500 in debt.

The student body president at UND who plans to graduate in May said his debt is “very low” compared to many college students.

Even so, he’s among the first to sign up for free individual financial counseling at Financial Wellness Services, a new office that opens this week in an effort by the university to help students navigate what for many is foreign territory: the world of finance.

“I’m competent about personal finances,” he said. But “I’m not a finance person at all. I’m not ashamed to admit that.

“I’m learning though; I’m getting better.”

Only about 10 percent of universities offer this type program, said Patrick Hendrickson, a UND graduate student who’s working part-time as content and research coordinator at Financial Wellness Services.

“A lot of people, especially in my age group, 15 to 24, have a strong disconnect from finances. They don’t have financial knowledge.”

Because of that lack, along with “the high level of debt that they’re accumulating, they are forced to leave school before finishing” their degrees.

“We asking (students) to be decision-makers about tens of thousands of dollars,” said Laurie Betting, associate vice president for health and wellness at UND. “We’re wrapping it around ‘wellness,’ because it’s a journey, a lifetime journey.”

When students are asked in UND surveys what causes them the greatest stress, “finances comes to the top,” she said.

She expects the new office in McCannel Hall to draw students who want to increase their knowledge as well as those “who have started to dig themselves into a hole and need a hand out,” she said.

“I suspect (students) get into trouble because they’ve purchased things well beyond their means. When they get into these situations, and they’re working umpteen jobs, something has to give and sometimes it’s higher education.”

‘A huge difference’

Fletcher intends to graduate in May with a bachelor’s degree in international studies and then pursue a master’s degree in higher education administration.

He’s looking toward graduation with an eye towards beefing up his financial knowledge and skills.

“I have a hard time figuring out how to make an accurate budget, how to predict expenses and stick to a budget,” he said.

He wants to “clarify and really understand, with the amount of aid I’ve received, what does that mean? If I only pay the minimum, how much extra will I pay?” he said. “If I pay it off quicker, how much of a difference will that make?

“Seeing those numbers, I think, will make a huge difference.”

Fletcher has kept his debt low by working several part-time jobs during his college career, juggling as many as three jobs at once.

As student body president, he receives a tuition waiver. The role requires “close to 40 hours a week,” what with travelling and meeting with students and university officials, he said. He also works from 10 to 20 hours a week remotely for a Twin Cities organization.

He has seen students get into financial trouble because they’ve mismanaged money.

“I have a lot of friends (who) are not getting help from their parents. Some take every other semester off, or take time off from school, so they can get a fulltime job. It slows them down from finishing their degree.”

For graduates, the average indebtedness of those who spent their entire undergraduate college career at UND is about $23,500, based on most recent data.

Fletcher maintains that it’s critical for students to understand student loans.

“Some see it as ‘free money’ and confuse grants with scholarships and subsidized loans…

“It’s important to learn these things before you get out into the world to be successful not only in your professional life but in your personal life.”

Scant financial background

Growing up, Fletcher didn’t hear his parents discuss financial matters.

“I came from a background where we never had to think about financial problems,” he said. “If there were financial problems, they never talked about them.”

When he enrolled as a freshman at UND, like many other students, he had his parents fill out the forms required to obtain federally sponsored financial aid. The forms help administrators determine the type and amount of funds that make up the student’s total financial aid package.

He was the first in his family to apply for loans to fund his college education, he said.

Parents are often uncomfortable talking about finances with their children, according to a survey given to parents of first-year students by UND’s health and wellness division.

“The parents would tell us, ‘we’d rather talk to our sons and daughters about sex than money,’” Betting said.

Some parents may feel ill-equipped to discuss money matters, said Hendrickson who holds an undergraduate degree in business administration and is working toward a master of business administration degree at UND.

He is one of three graduate students employed in the unit. Others are Kyle Thorson, who’s working toward a master of public administration degree, and Jennifer Schwartz, a graduate student in education.

Six peer educators are also trained to provide one-on-one counseling to help students understand credit, budgeting, student loans and savings.

Linking with partners

They will work with other UND units, such as student account services and the counseling center, to help students resolve issues, Betting said.

Off-campus interests, including U.S. Bank and the Bank of North Dakota, are also involved.

For the past five years, U.S. Bank contributed toward a similar program at UND’s College of Business and Public Administration, said John Snustad, the bank’s regional president, Grand Forks.

It will continue to support the “bigger and better” program, he said. “It’s a very forward-thinking project to get involved in.”

Students will benefit by “having less stress, making good decisions earlier in life that will help them long-term, and learning about this from peers in a safe environment.”

“Everyone needs this information,” Snustad said. “We all get it in different ways, sometimes by making mistakes.”

He’d like to see young people avoid financial errors — such as mishandling credit — that could hamper their ability to secure loans in the future.

Although credit has tightened somewhat in recent years, there’s still a lot of it, he said. “It’s important to know when to borrow and when not to. It’s easy to get in over your head.

“It’s easy for a young person to have four or five credit cards that have a negative rating. That will lead to three or four years of problems. If they go into bankruptcy, then you’re talking eight to ten years of problems.”

In addition to the financial headaches, getting into such difficulties takes a toll on one’s self-concept, Fletcher said.

“Students are told, growing up, ‘get a college degree and you’ll make it in life.’ For certain people, you don’t get a job or you don’t get one that pays enough to pay (debt) back.

“It wears on a person emotionally, and there’s added stress. You may think, ‘what did I do wrong?’”

Betting said, “I’ve seen lives gone astray and dreams abandoned…

“We haven’t run into anyone who’s said this isn’t a need. The need is great.”

With financial counseling, “maybe we can help these students focus on their primary purpose for being here, and that is their education.”

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