By Duane E. Whitmire, PhD
19 May 2008

Students at Bowling Green State University took out about $129 million in student loans last year. Multiply this by the thousands of colleges throughout the nation and you begin to get a picture of the staggering debt crisis wrought by the ever-increasing costs of higher education.

The figures are indeed disturbing:

* College students who graduated in 2006 with debt owed an average of $21,000, not counting credit card debt;

* Fifty-one percent of student loan recipients said it would take them more than 10 years to pay off their college loans;

* The average college student credit card debt is about $2,700, with 10 percent owing more than $7,000.

Spurred by an editorial in the student newspaper calling for the university to "do more to help good financial planning and raise awareness of this important issue," Bowling Green State University decided it was time to help its students fight the rising costs of higher education.

The university created an innovative student service designed to assist its 21,000 undergraduate and graduate students with curbing college debt through money management. The service is staffed with a full-time financial educator, a highly unusual commitment for a university. Known as Student Money Management Services, (SMMS) this new office offers individual financial education sessions which enable students to proactively manage their finances as they pay for college and make better decisions about loan and credit card debt.

Each session focuses on three objectives:
. to listen to students and help them identify their financial education needs;
. to develop a plan to meet those needs identified;
. to begin to create a personal budget.

Patterned after successful student money management programs at the University of North Texas and Texas Tech University, the new SMMS office has designed student-driven Individual Financial Education Sessions. These unique hands-on sessions are conducted by both a trained professional and a peer, a trained upper-level undergraduate student. The student seeking money management assistance gets financial perspectives from both a trained fellow student and a knowledgeable professional.

Known as the Peer to Peer Plus Program, students are the heart and soul of all services provided. During the session, students are also directed to a comprehensive student money management web site with local, state, and national resources (www.bgsu.edu/smms). In addition, they are also given information about Falconomics Group Seminars. Topics include Good Debt, Bad Debt; The Truth About Credit Cards; Budgeting; Making the Most of Your Money; and others.

By meeting with students and giving them useful financial education resources, students not only learn how to better deal with the rising costs of higher education and loan and credit card debt but also gain a lifelong money management lesson. As students assimilate the information, they quickly learn to transition from theoretical to practical by applying this knowledge to real life situations.

A third-year finance major who recently completed the program said that her generation is a product of the credit generation that charges and charges. Now with this program in place, she can actually manage her money for the first time ever. Instead of incurring endless credit charges, she now regularly deposits money into her savings and tries to repay balances each month.

Although it is too early to draw specific conclusions, one could project that students who increase their money management skills by just 10 percent could see significant savings on a $100,000-plus college investment.

By helping students analyze their financial situations, learn how to create a budget, and commit to controlling their financial lives at the university and into the future, the fight against the rising costs of higher education has only just begun. It’s now time for colleges and universities everywhere to teach money and debt management to their students. College students expect and get career advice from their campus career service office. They deserve good financial management advice as well.

Duane E. Whitmire, PhD, is the Director of Student Money Management Services at Bowling Green State University.