Financial Planning Tips for Students
by your Director of Student Services
Like many of you, when I was a student at DSPT I relied on student loans to cover the costs of my education including rent and living expenses (when necessary). I made some decisions as a student, like working three small part-time jobs, which benefited my financial, educational, spiritual and pastoral life. I made other decisions that were less beneficial. I'm not a financial expert, but I have learned a few things that I'd like to share to guide you figuring out how to pay for your program and life in the Bay Area. Some of my tips are obvious, simple, common sense and you may feel I've insulted your intelligence just by listing them. I'm not exactly. I find that graduate students (especially those with their mind focused on the mysteries of God and creation) tend to lose common thoughts involved in surviving the day in the contemplation.
Ok, so here are some of the things I've learned:
Make a yearly and monthly budget for your program and your life. There is a bottom line that your rent, food and utilities are going to cost every month. Know that number. Also, there will be that book or record that you absolutely need in your collection and that movie or concert you need to watch in order to help clear and reset your brain. Be aware of how much you are spending monthly to determine how much you need to borrow and how much you need to earn. Tracking your spending will help you avoid wasting money and to live within your means. How to create a budget.
Apply for scholarships and grants. DSPT offers some scholarships and grant-in-aid, but cannot fully fund every student. There are a number of foundations and individuals who have scholarships funds specifically oriented toward graduate studies in Philosophy and Theology. The GTU Scholarships database is an excellent tool to launch a search: http://scholarships.gtu.edu/.
Avoid using student loans to pay for your daily living expenses. I know that you want to spend every waking moment studying and contemplating, but you need to find sources of income that do not suck money away from your future self.
Avoid paying unnecessary fees. Use ATMs specific to your bank or get cash at the grocery store to avoid ATM fees. Pay your bills on-time to avoid late fees. Walk downtown to avoid paying for parking. Remember to move your car every two hours from 8 am - 7 pm to avoid parking tickets. Credit cards generally have outrageous interest rates; try not to use them unless you can pay off your balance monthly or bimonthly.
Get a part-time job or two. There are student jobs offered at DSPT and the GTU, but there are more students than positions available. Berkeley is a vibrant area full of coffeeshops & cafes, used bookstores, restaurants, parishes and non-profit organizations who may hire you. This page of Career Links should provide some assistance in beginning a search. You may also contact the Tri-School Career Advisor at JST to get on an email list for part-time jobs in the area and full-time jobs you may be interested in after graduation.
Pay off the interest accrued on your student loans during your program before your graduation date. Otherwise, this money gets folded into your principle and you will pay interest on it all. Even if you have somewhat low rates, that's going to cost you thousands of dollars you don't get to spend on anything.
Make your small monthly payments. I made infrequent large payments right after I graduated for a few years. I thought I was doing well in chipping away at my student debt. But I didn't realize the interest was growing significantly in the months that I didn't make a payment (even though I was technically paid ahead). It took time and a lot of frequent large payments to get the interest back down. My monthly payments prescribed by my lender cover the interest accrued in the month and pay a small amount to my principle. If I can afford to make large infrequent payments now in addition to the small regular payments, I'll actually take chunks out of my principle and actually make a move toward being out of debt.
Graduate as close to 'on-time' as you can. The longer you prolong your program and fund your life on student loans, the more miserable you are making your future self who will be paying your debts for more years than you may be imagining.
DO NOT default on your loans! You will destroy your personal credit. You also may prevent DSPT from being able to provide loans and other financial aid to future students.