But student loans are an important way that many American families finance higher education and typically a more affordable avenue than using a credit card.
Student loan provider Sallie Mae reported earlier this year that 30 percent of students were paying for tuition on their credit card – one factor that could lead to future credit card debt.
Understanding the finances of your son or daughter’s education is important – but sharing that information with them is another good practice. With many schools talking about, but not yet implementing financial management classes, parents play a critical role in their kids’ financial literacy.
After college it’s important for parents to share their past missteps or smart financial moves with their kids to help keep them on a debt-free path.
Victoria Woods, president of ChappelWood Financial Services, says investing in and understanding 401K investment plans at a student’s first job after college is important. But she also advises recent graduates to be careful and build responsible credit card habits.
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