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Tuesday, April 7th, 2009

April 11, 2007 Ed Cartoon

Debt incurred from student loans is a real problem among university students. Along with loan debt, many students run into trouble with credit card-related debts and are laden with poor lines of credit.

Students must be responsible and plan ahead at university to ensure they don’t spend beyond their means.

University is a drastic lifestyle change for most students; they may not have as much, or any, financial support from their parents and must take responsibility for their own finances. Many students are first exposed to owning a credit card in first year and they don’t all handle this newfound freedom well.

Practical information would help future crops of students; perhaps accounting courses should be mandatory in high school to ease the transition. Some groups at Western make efforts to educate people; the University Students’ Council recently ran an income tax clinic. But students need easier access to sound information and advice. Some programming could be organized in residence to make a typically boring topic like financial planning a little more engaging " maybe something akin to the “condom game” commonly used in residences to educate students about sexually transmitted infections.

Parents should also take more time to teach their kids the importance of prudent financial planning earlier. Maybe they can give their kids credit cards with low limits on them when they’re in high school to get them adjusted to increased responsibility. Often, the best way to teach someone is to let them experience the concepts first hand.

Some form of education has almost become a prerequisite for professional success or living above the poverty line today. Because education is so vital to financial well-being, the Ontario government should consider more subsidies and grants for students who have the aptitude and willingness but lack the economic means. Many students get screwed by the system, including those with OSAP loans, and are buried under mountains of debt.

While student debt is an important problem that needs addressing, the onus is still largely on students to keep credit card debts and loans manageable. Some students abuse the system of OSAP by taking trips to the tropics and splurging on impulse buys. Students must be wise in how they spend the money, because large debts and a poor credit rating can plague them for the rest of their lives.

Tuition and student fees are so steep in Ontario that some students can barely afford basic needs. However, the government isn’t entirely to blame; students must pre-emptively manage credit card debt so it doesn’t exacerbate their already daunting financial load.

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