College student debts
originally posted: 11/22/2006 reposted: 2/18/2011 This post has not been recently reviewed or revised by the author and may be out of date. If you notice an error or are in doubt, please send a new question by email or ask for an update. Email asktony@tonynovak.com.
Q: I am concerned about my daughter in college. She borrowed tens of thousands of dollars for tuition and has several credit cards that are add even more debt. She does not have any idea how to pay these off.
A: 'Generation Next' is replaced by 'Generation Debt'. Young people now leave college with an average of $20,000 debt in credit cards and student loans. Few have any significant savings or financial assets. This age group are more likely to make serious financial mistakes and seldom have access to a qualified financial adviser. When they are finally exposed to a financial professional, this person is more likely to be a sales representative for an insurance or investment company than a person focused on the first three most important financial steps; 1) cutting costs, 2) reducing debt and 3) building cash reserves. The best thing you can do is to sit down and reach a specific action agreement with you daughter if you are expected to continue to provide financial support. If you daughter cannot agree to and follow-through with a responsible plan of action, then you must take the difficult step of cutting of financial support.
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