ABOUT ME: I'm a financial aid expert and the director of student advocacy at cuStudentLoans.org. Learn more about credit union private student loans and college planning by visiting my blogs.
Once again it’s college graduation season. Commencement speakers are being announced at a daily pace, many hailing from business and industry, government, health-care and entrepreneurial backgrounds. They all have a great deal to share in making memorable graduations for thousands of students each year.
As Adam Levin of Credit.com highlights in a new essay “5 Things Every Commencement Speaker Should Say”, speakers regularly fall back on famous quotes to carry the speech like Emerson’s “Hitch your wagon to a star” and miss the opportunity to address the topics more necessary now than ever.
Here are the highlights:
Manage your student loans
Get a federal student loan consolidation to help predictably manage your federal student loan repayment. This is a no-brainer, and only requires your time to complete the online application. Direct loans federal consolidation uses the weighted average interest of each debt, and combines all the old loans into one new application.
Then sign up for automatic payments from your checking account to put repayment on cruise control,. See if you qualify for an interest rate reduction too.
If financial struggles hit, look into income-based repayment or pay-as-you-earn programs with federal student loans to extend the term and reduce the minimum payments. Private loans may offer a forbearance while you get back on your feet.
Finally, look for consolidation on any private loans outstanding as interest rates are at record lows and could help save a bundle.
Increase your credit score
Experience is the toughest teacher because it gives the test first and the lesson last. Many college students learn about their credit through the experience of running up credit card debt and struggling to pay it back. Same thing goes for students that took out huge student loans and are suddenly responsible for large payments after graduation.
After exiting college, the rules upgrade to real-world status. Every payment made towards debt becomes a credit building opportunity and not all debts are created the same. As Adam explains:
“It’s a popular misconception that large student loan debt hurts your credit because it represents such a big chunk of your available debt. Credit utilization (balance/limit ratio) that amounts to about 30 percent of your credit score applies almost entirely to “revolving” credit, such as credit cards, which come with defined credit limits.
“Student loans, on the other hand, are considered “installment” accounts — just like auto loans and mortgages — and carry no penalty for big balances. But the key is paying on time. ”
Manage your credit
The power of leverage is real. Manage your credit portfolio to help protect yourself and maintain financial security. Adam advises:
- Check your credit reports and review your bank and credit card account activity daily to protect against fraudulent activity.
- Sign up for programs offered by financial institutions that notify you when transactions post.
- Don’t provide personal information to people you don’t know.
- Don’t needlessly apply for credit but always be looking for the best deals, rates and rewards.
- Check your credit reports for free each year at AnnualCreditReport.com.
There are plenty of free tools out there, like Credit.com’sCredit Report Card, that provide you with an easy-to-understand overview of your credit standing.
Clean up your Facebook and Twitter accounts
In an interesting addition to this list, Adam makes points about risks of personal identity on the Internet. The basic point: Anything provided on your Facebook page is no longer your private information. The future will be dominated by businesses and agencies that make best use of this personal data.
“In a world where every word we write, and every picture and video we post becomes another tile in our undeletable digital life mosaic, it is imperative to act appropriately in all social media environments.
“It’s not just your friends and Twitter followers who are interacting with and scrutinizing you. It’s also future employers, financial institutions, insurance companies, divorce lawyers, identity thieves, debt collectors — even government agencies and intelligence services. ”
Protect your identity
“Our identity, like your credit, is a huge asset,” Adams says. It has many components. And like credit, it can be your best friend or your worst enemy (an enhancer or destroyer), depending upon how effectively and responsibly you manage it.
“Limit the amount of private information you share with people who you don’t (or even do) know, or institutions you think you know, and make sure that when you share, the data you provide is properly protected.”
As we enter college graduation season, let’s hope common sense advice remains common for everyone.
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