How Students Play the Finance Game – Marquette Wire
Renzo Silvera plays chess, but not with pawns. For Silvera, a senior at the College of Engineering, managing money in college is like this strategy game.
“You have to see who your opponent is,” Silvera said. “In this case, it’s the financial system. And then, instead of just looking at a front, try looking five or more steps ahead of you.
Silvera speaks from experience and easily lists the books of self-made millionaires: When he was ten, his family moved from his home country of Peru to San Jose, California, which neighbors entrepreneurial Silicon Valley . Soon after, his parents introduced him to the concept of personal financial management.
“They just kind of let me do it myself,” Silvera says. “Since I was 17, I haven’t asked them for anything.”
So when it came to college, Silvera knew the numbers game. Thanks to external, private scholarships, institutional grants and savings from secondary activities, he says he was able to avoid going into debt. In his second and first year, he became a resident assistant and also saved money that way.
“It’s a big advantage, that’s for sure. Instead of paying loans, I can use them for investments that can be profitable,” says Silvera.
But for many other students, bumping into the financial system alone is frightening, and budgeting for bills can be a bewildering process. Along with racking up high debt, day-to-day money management remains the most daunting challenge, with nearly half (47%) of students saying they don’t feel ready to do so, according to a 2019 survey. by EVERFIan organization that focuses on social inequalities within the American education system.
“It’s a tough game,” said Silvera. “It’s very complicated.”
Pass Go and Collect Loans
The EVERFI report, entitled “Money matters on campus,also found that while six in 10 students have taken out or plan to take out loans to cover their tuition, only 65% plan to repay them on time or in full.
These trends worry some professors at Marquette University, one of whom shared his own struggles at school.
“When I was in college, my dinner was microwaved popcorn with parmesan cheese,” says Lora Reinholz, a finance teacher and Marquette alumnus. “I was so broke that in my last semester I went part time because it was cheaper than full time.
Reinholz took out thousands of student loans, remembers finding on-campus groceries too expensive, and in the 1980s and 2021 she says students are asking the same questions:“How am I going to pay off my student loans in addition to my tenant insurance, my transport, my food? » Will I ever buy new clothes, go out with my friends or travel to see my parents? »
When Taylor Morant, a senior from the College of Communication, arrived on campus as a first-generation commuter, she had some of these questions, especially about covering her tuition. Because her mother had turned to student loans to fund her high school education, it was an option that Morant herself took, she says.
“I don’t know if there will be a time when I stop paying off college loans,” Morant says. “I’ve taken out a loan every year so far.”
According to Pew Research Center: “About two-thirds (65%) of first-generation college graduates owe at least $25,000 or more, compared to 57% of second-generation college graduates.”
But whether first-generation or not, students from diverse economic backgrounds feel unprepared to handle student loans responsibly, Reinholz says.
“There are students walking around with over $100,000 in debt, which is really scary,” she said.
Over the past decade, student debt has increased by 107%, according to an analysis by Federal Reserve numbers by CNBC News. Today, nearly 44 million Americans have accumulated nearly $1.7 trillion in student debt, with the average total student debt amounting to $30,000 a year. US news data.
Second draw: financial health and emotional health
Stress levels rise among college students when it comes to managing their money because financial health and emotional health are so intertwined, Reinholz says. And according to the Financial barometer 2019 by EVERFIthe three highest stress points are: fear of rising tuition, having enough money to last the semester, and getting a job after graduation.
There was no Marquette tuition increase for 2021-2022, as rates are set by the Board of Directors after reviewing certain costs. According to school website, 46% of tuition is used for faculty and staff compensation, 27% is used for scholarships, and 16% is used for student support. The remaining 11% goes to installation and administrative services.
So without fear of tuition increases, the two main stress points are having enough money to last the semester and landing a job after graduation, Morant says.
“I have savings, but it goes down quickly. There’s always something wrong,” Morant says.
Like his broken down car, for example.
In order for her to have enough money to last the semester, Morant goes to campus and works two part-time jobs at Marquette. And although car repairs are a necessary expense, such surprises eat away at his savings.
And because of his two part-time jobs, Morant feels like she can’t afford to take an unpaid internship, even though it might benefit her career: college graduates who have done internships are 90% more likely to receive job offers than graduates who did not, according to an analysis of survey data from the National Association of Colleges and Employers (NACE) by WIRED.
“I don’t know if I’ll get a job as a journalist,” Morant said.
But Morant is not alone. For Vanessa Morales, a junior in the College of Arts and Sciences who is also a first-generation student, these stress points can distract from college classes. She says she feels like she had to choose between going to class and clocking in “often” because she needs to earn money.
This is a concern for professors like Reinholz, who says that if students In the class are stressed because they work too much, their main objective is not necessarily to learn the subject.
“Work helps you pay for things, but you really have to focus on school,” Reinholz says.
But as Morant and Morales say, it’s hard to focus on school. For them, it’s a game of balancing risk and reward.
Risk and Reward
But even with student debt and soaring stress levels, documents prove that having at least a bachelor’s degree pays off in the long run, as adults who have completed their education tend to accumulate more wealth, according to Forbes.
Ian Gonzalez, vice president of finance at Marquette, echoes that sentiment.
“You can take out loans to pay for that degree, or you can take on additional jobs,” Gonzalez says. “Obviously there is pain to get to a point like this, but I can tell you the payoff at the end is high.”
While Reinholz echoes that sentiment, she says pain can impact students’ ability to stay engaged in their professional lives, which in turn impacts future productivity and wages.
In other words, she says, if the risk becomes more than the reward, it’s important to seek help.
“We want the best for our children,” says Reinholz. “If you don’t tell anyone, no one will know. And if no one knows, how can we help? »