Thursday, June 15, 2006

Corporate environments, sprawling apartments, financial freedom - such are the dreams of many college students as soon as that final exam is passed in. They hope to ditch their graduation gowns for a life on their own.

Unfortunately, rising student loan payments make this difficult. Recent studies show that the price of education is higher than ever - could the use of a payday loan be the answer?

For the 2005-06 school year, the average cost of attending a four-year public school was $5,491, according to the College Board. Meanwhile, full-time enrollment in a four-year private university set students cost $21,235. Consequently, the U.S. Department of Education's National Center for Education Statistics reported that an estimated 65 percent of the students who graduated in the 2003-04 school year had student loans.

That's A LOT. The result? Graduates are soon saddled with debt before even receiving their first paycheck. For this reason, many turn to online payday loans.

It's hard to blame them. While the APR on such fast payday loans can be excessive, the same can certainly be said of student loan interest. In a recent survey titled "The College Debt Crunch," 42 percent of responding college graduates with student loans live paycheck-to-paycheck.

Meanwhile, 34 percent claimed to have sold possessions to make ends meet.

"I think it's a wake-up call to parents and grandparents that children are graduating school with tremendous levels of debt," said Michael Conrath, vice president of college savings plans for AllianceBernstein Investments Inc.

The aforementioned poll was released by AllianceBernstein and conducted by Matthew Greenwald & Associates Inc.; it spoke to 1,508 college graduates between the ages of 21 and 35. Finances weren't eventhe only concern.

Some respondents reported suffering from anxiety and depression stemming from student debts. Others blamed burdensome loans for the postponement of major life decisions. Those consider applying for a payday loan online were hoping to stem the rise of these bills.

"It's not just about those four years; it's about their lives after college," Conrath said. "There are the rites of passage you look forward to after you graduate, not just the thrill of the first paycheck, but even considering getting married, buying your first home."

Whether or not you decide on acquiring a payday loan to deal with overwhelming debt balances is up to you. Just be aware of the possible pros and cons of payday advances across the board.

This entry was posted on Thursday, June 15th, 2006 at 7:48 am and is filed under Consumer Debt, Advice.