By Hon. John C. Ninfo II
22 July 2008

Christine was teary-eyed as she sat in bankruptcy court at age 25, explaining how she incurred her $54,000 in student loan debt and $60,000 in credit card debt. Most of the credit card debt was incurred while she was in college.

The $23,000 a year job she got after college was not enough to live and make significant debt payments. Christine was embarrassed and worried, because she was not sure she would ever be able to pay the student loan debt that even bankruptcy won’t eliminate.

A college education is a great investment in terms of overall earnings throughout your lifetime.  However, before you and your family start figuring out how you are going to pay for college, you should analyze whether the degree you will pursue at the school of your choice is a good value.

How will you pay back the loans? Will the debt seriously limit your future career or family options because you have to pay off the loans? Can you get the same quality degree at another school for a lot less?

Christine’s story is repeated too often at bankruptcy courts across the country, and is one that you don’t ever want to have to tell. What can you do to make sure this doesn’t happen to you?

* Minimize your debt. Enjoy your time at college. Have fun, and learn as much as you can. But try to avoid debt by maximizing what you have to spend and making sure your expenses are reasonable and necessary.

* Create a budget. Read "Creating a Realistic College Budget That You Can Stick To" at careprogram.us for some great tips on budgeting and keeping your expenses in line.

* Maximize your income. Aim for the best-paying summer job that you can get; and if you can do it without hurting your grades, get a job in college.

* Look for deals. Be proactive and creative in looking for deals in everything you buy or do. Look for the many free activities on campus. Before you do or buy something, ask yourself if it’s in your budget and if it’s a need or a want.

* Avoid having a credit card until you’re a senior in college. Resist the temptation to sign up for a credit card for a free gift. You can purchase everything you need with a checking account, debit card or cash. Use cash as much as possible, especially for things under $20 and items you can eat or drink. You will make better spending decisions and spend less. If you have a credit card already, have only one, use it for emergencies and make sure you pay the balance off every month.

Hon. John C. Ninfo II is a bankruptcy judge for the western district of New York. For more information, visit careprogram.us

Reprinted with permission from Credit Abuse Resistance Education Program.