Campaign Launched to Educate Students and Families About Responsible Debt Management

NATICK, Mass., Oct. 24  /PRNewswire/ -- With the cost of higher education on the rise, it is more important than ever that college students and their families make smart choices about paying for college, budgeting, managing their money, using credit and borrowing to finance their education. To address this growing concern, The Better Business Bureau, Inc. Serving Eastern Massachusetts, Maine & Vermont has teamed up with the Massachusetts Educational Financing Authority (MEFA) and Sallie Mae(R) to increase public awareness of smart money management and dealing with debt, through a three- month public education campaign.  The "Debt Management for Undergraduates" campaign emphasizes how to budget and borrow wisely, and provides crucial tools and resources for young people, their families, and educators.

"College students often have little disposable income, but are surrounded by the temptation to obtain credit cards and spend money they do not have," said Paula Fleming, vice president of communications and marketing of the Better Business Bureau, Inc. Serving Eastern MA, ME & VT.  "Poor decisions made in college, such as accruing credit card debt for non-essential expenses -- or even worse, paying for college with a credit card -- can do long-term financial damage, unnecessarily increase the cost of their higher education, and launch students into a spiral of debt that can follow them well beyond graduation."

Over the next three months the BBB, MEFA, and Sallie Mae will disseminate information and tips on money management, responsible borrowing and proper use of credit through the media, educators, seminars, and on the BBB's Web site, http://www.bbb.org/.

Using credit cards wisely is one significant step young people can take to avoid getting mired in debt.  The BBB offers the following tips to help students manage their money and make sound financial decisions:

  * Understand your financial aid choices and go for the most cost-effective
    options. The College Board reported that more than $53 billion in state,
    federal, and institutional grants were made in 2005-06, but millions of
    students miss out on free money through grants and scholarships simply
    because they do not apply.  According to a report from the American
    Council on Education, 50 percent of undergraduates--approximately 8
    million students--failed to complete a Free Application for Federal
    Student Aid (FAFSA), the standard application used to award federal
    grants and loans.  Students and parents should also be aware of low-cost
    student loans available regardless of financial need or academic merit.
    The interest rate on the most common type of federal loan is roughly
    half that of the average credit card rate.  Borrowing wisely really does
    pay off.

  * Set a realistic budget and keep track of spending.  First, conduct an
    honest self-assessment of your needs, spending habits and lifestyle and
    set a practical budget.  Save receipts and check your account balances
    regularly, either by phone or online.  You should also screen your
    statements, online or in print, to check for unauthorized charges.  It
    is relatively easy to steal credit information, and if you don't monitor
    your account and billing cycle, you may miss unauthorized charges.
    Contact your creditor immediately if you notice a discrepancy.

  * Be credit-savvy. Take your time when considering a card, compare rates,
    benefits, and fees, and don't let a prize at a campus kiosk tempt you
    into opening a credit account.  Be sure to limit the number of cards in
    your wallet.  According to a study by Nellie Mae, college seniors have
    five credit cards on average, but more cards do not mean better credit.
    If a student decides to open a credit account, one or two major credit
    cards (one exclusively for secure online transactions, for example) --
    as opposed to higher interest store cards-should suffice.  Lastly, the
    best rule of thumb is to only charge what you can afford to pay off
    completely each month.  The Federal Trade Commission estimates that a
    $2,000 charge paid on the minimum monthly balance at 18.5 percent
    interest will take 11 years to pay off, and will cost almost double the
    original charge in interest.  It is best to pay off a credit card in
    full rather than pay the minimum.

  * Track your credit score vigilantly. By ordering a credit report annually
    you can ensure that no unauthorized credit charges, or even loans or
    mortgages, are reflected in your history.  If you find unauthorized
    credit in your name, contact the creditor immediately.  As part of the
    Fair and Accurate Credit Transactions Act of 2003, you are entitled to
    one free credit report per national credit bureau per year (a total of
    three free reports).  To order your free credit reports call (877) 322-
    8228 or visit http://www.annualcreditreport.com/.  It takes seven years
    for accurate, negative information to be deleted from your credit
    report.  Keeping your credit clean in college will help you in the
    future.

  About the BBB


Founded in 1920, the Better Business Bureau, Inc. is a non-profit, public service organization serving Eastern Massachusetts, Maine, and Vermont.  The BBB provides free business Reliability Reports, Charity Reports, and other invaluable consumer information to the public.  All BBB services are readily available on the Internet at http://www.bosbbb.org/.

About MEFA

The Massachusetts Educational Financing Authority is a not-for-profit, public State Authority dedicated to helping families financing higher education through low-cost financing alternatives, structured college savings programs, and by providing college financing expertise to students, families, colleges and universities.  For more than twenty-four years, MEFA has helped more than 200,000 students and families finance education costs.  MEFA's programs include the U.Plan Prepaid Tuition Program and the U.Fund College Investing Plan and numerous low-cost Federal and Private loan programs.  For more information on responsible borrowing and to download MEFA's free guide "Managing Your Student Life and Loans" visit http://www.mefa.org/.

About Sallie Mae

Sallie Mae(R) is the nation's leading provider of saving- and paying-for- college programs.  The company manages more than $130 billion in education loans and serves nearly 10 million student and parent customers.  Through its Upromise(R) affiliate, the company also manages more than $11 billion in 529 college-savings plans, and assists more than 7 million members with automatic savings through rebates on everyday purchases.  Sallie Mae and its subsidiaries offer debt management services as well as business and technical products to a range of business clients, including higher education institutions, student loan guarantors and state and federal agencies. More information is available at http://www.salliemae.com/.  SLM Corporation and its subsidiaries are not sponsored by or agencies of the United States of America. 

DATASOURCE: Better Business Bureau, Inc.



CONTACT: Paula Fleming, VP of Communications of Better Business Bureau,

[phone]; or Thomas Murphy, Director of Programs, Massachusetts

Educational Financing Authority, [phone]; or Beth Guerard, Manager,

Corporate Communications, of Sallie Mae [phone]



Web site:  http://www.bbb.org/

http://www.mefa.org/

http://www.annualcreditreport.com/

http://www.salliemae.com/ 

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