'Ti$ the $eason to Check on College $tudent$

One of the things we enjoy doing as a family is attending the University of Missouri football games. The first game I just shrugged when we noticed the long lines of college students waiting to fill out a credit card application in return for a Mizzou bucket hat.

The second, third and fourth games it became more alarming as the lines of students filling out credit card applications got even longer at the football games.

Why is this alarming? According to the 1998 National Student Loan Survey, about half of all students who drop out of school do so because of worries about borrowing - not nearly as much for educational expenses as for discretionary daily living/consumer expenditures.

The number of bankruptcies among young people under age 25 has grown by 50 percent since 1991, says bankruptcy expert Elizabeth Warren, a professor at Harvard Law School. She expects another 100,000 to file for bankruptcy this year.

Graduates, by the same token, wind up spending $150 a month to repay educational loans but shell out nearly five times as much to pay for other borrowing (like ski trips and pizza parties).

Why did I select the Holiday Season to bring up this topic?

Too often that's the only time we predictably see the busy college coeds in our family.

So, this year when I see the college students, I'm going to bring up the subject of finances and ask how they are doing.

Janet Bodnar, a writer for Kiplinger's Personal Finance, says kids over 18 don't need our permission to get credit cards, but they need our advice on how to use them if they are going to avoid common student traps. Students tend to equate credit cards with free money (in a recent survey of college students, fewer than half of those interviewed knew the interest rate on their cards).

Their definition of a financial emergency may be different than their parents, including a spring break ski trip or an order of pizza for the entire dorm floor before finals.

Jerry Stebbins, assistant dean for student affairs in Washington, PA says, "I'd recommend that parents provide kids with a credit card to buy books and other school needs at the beginning of the year and then get the card back. In Stebbin's experience students with a card on their parent's account "seem less likely to binge-spend."

Do they have a financial plan? As long as you have broached the subject with the college students in your family, ask them about their budgeting practices.

According to a recent poll of 500 college students by Campus Concepts as reported in Kiplinger's Personal Finance, the average student spends about $500 a month, mostly on food (20%), entertainment (17%), and personal care (15%). Beer was the fourth-largest budget item (11%), ahead of auto expenses (8.2) and phone charges (5.7).

So, Amber, Nathan and Ryan get ready. I'm sending you a copy of this article as fair warning that the topic is going to come up when I see you.

Now, think for a moment, who in your family do you need to talk to about college finances?