Bridging the Gap Between College Loans and Working Professionals

Today’s college graduates leave the graduation ceremony with more than just a diploma. According to CNN Money, two-thirds of the class of 2010 had “an average of $25,250” in debt. This data, taken from the Institute for College Access & Success’ Projecton Student Debt, reported that these graduating seniors entered the job market at a time when the “unemployment rate for young college graduates” was at an all-time high of 9.1%.

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The Project on Student Debt looked at debt levels for students at more than 1,000 colleges and universities across the U.S and the District of Columbia. Students carry more debt due to increasingly high tuition fees and a struggling economy.

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What Do College Students Owe?

Unlike scholarships, which are awarded to students by colleges and other organizations and do not need to be repaid, a loan for educational purposes needs to be repaid. The SmartStudent Guide to Financial Aid summarizes the 3 types of education loans:

  1. student loans — Stafford and Perkins loans
  2. parent loans — for example, PLUS loans
  3. private student loans — also known as alternative student loans

A 4th type of loan — known as a consolidation loan — can be used for the borrower to group all loans into one, unified payment. More than “$100 billion in federal education loans and $10 billion in private student loans are originated each year,” according to the SmartStudent Guide to Financial Aid.

Federal education loans are disbursed through each college’s office of financial aid with funds from the U.S. Department of Education as part of the Direct Loan program. Student loans, like Stafford and Perkins loans, and federal education loans, and Parent PLUS loans are available to students and their parents. The interest rate for federal student loans, Parent PLUS loans, and consolidation loans range from 6.8% to 8.5%.

Very few students can attend college without some form of financing. In the 2007-2008 school year, more than 65% of students in a 4-year undergraduate program graduated with some debt. The average debt for each student is approximately $23,186 (excluding Parent PLUS loans), according to the SmartStudent Guide to Financial Aid.

Using data from a U.S. Department of Education study, SmartStudent reported that the “median cumulative debt” was $19,999 in 2007-2008 school year. The U.S. Department of Education released its National Postsecondary Student Aid Study through its National Center for Education Statistics. A total of 114,000 undergraduate students and 14,000 graduate students were surveyed. With students carrying loan debt, finding employment is paramount.

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Finding a Job To Pay Off Your debt

A USA Today article from 2010 chronicled the path of a Class of 2010 graduate. In the 2010 school year, there were 2.4 million graduates who received either bachelor’s or associates degrees as reported  by the USA Today using data from the National Center for Educational Statistics.

Today’s graduate faces not only the task of finding a job but also will be competing against other graduates, workers who were laid off, retirees returning to the workforce, and graduates from previous years who still have not found employment.

Jason Ferrara, a senior career advisor for CareerBuilder, stated in the article that stiff competition for jobs is coupled with an unemployment rate above 9%. Ferrara, referencing a  2010 CareerBuilder survey, noted that less than half of employers would hire a new college graduate. Graduates who must repay debt after graduation face a bleak future.

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What Happens If You Can’t Find a Job?

In today’s tough economic times, finding a job may not be possible for all graduates. But, with the burden of loans, students need to look carefully at their financial situation. CNN Money offers recent college graduates and others a primer on controlling personal debt.

According to CNN Money, the path to managing debt starts with looking at your financial situation, including examining:

  • credit card balances, rates, and minimum payments
  • loan balances, rates, and payments
  • day-to-day spending — keep records of what you spend

The next step is to pay off debts with the highest rate first. For college graduates, the highest debt will be the student loan. CNN Money recommends that you seek the counsel of a financial advisor before your situation escalates.

If you are unable to find a high-paying job, but have a job, your loans will still need to be repaid. Students should know that there is a 6-month grace period for repaying a student loan. The SmartStudent Guide to Financial Aid recommends that recent graduates adhere to the following guidelines when dealing with their student loans:

  • set up a folder for all loan paperwork
  • add a reminder to your calendar when the payment date is due
  • don’t miss a payment
  • set up an automatic debit from your checking account

Graduates may apply for a temporary suspension of loan payments in times of economic hardship, according to SmartStudent Guide to Financial Aid. But, suspensions of loan repayment will increase the amount of the loan.

Another option for graduates who need to repay their loans via monthly payment is a short-term loan. Short-term loans are also known as payday loans.  A payday loan or short-term loan can be obtained from a payday lender. Payday loans range in amounts from $100 to $1,000, with finance charges, maximum loan amount, and repayment date varying by state and lender.

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Graduates face an uncertain future with high unemployment rates and jobs harder to find than in previous years. With planning and patience, graduates will learn how to manage their loans and their financial situation.

College Students Flocking Home

In past years, college graduates could look forward to living on their own after graduation. This article examines how today’s college graduates, impacted by the country’s economic situation, are returning home to live with their parents.

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College Students Flocking Home

The Los Angeles Times recently released a study showing that college is the “best investment a person makes in a lifetime.” College is “expensive, but a smart choice,” the study said. In 2010, 90 percent of college graduates found work. The International Business Times concurred that “joblessness among college students is fairly low, and has been steadily declining for the past few years.”

If this is true, why are many graduates flocking home? The USA Today reports that job seekers are competing with their classmates and other workers, which includes those who have been recently laid off, retirees returning to the workforce, and those still looking for work after graduating in previous years. Finding a job after graduation is paramount for today’s graduates who may have debt from “tuition, room, [and] board.”

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Job Prospects for Graduates

In its Annual Job Forecast, CareerBuilder found that graduates from spring 2010 entered a “highly competitive, but…showing some signs of improvement” job market. CareerBuilder reported that employers would give 2010 graduates salaries from $30,000 to $40,000. Though college graduates may find employment, will they be able to live on their own?

Those who leave college but do not find permanent employment may need to find part-time jobs, jobs outside their major, or internships, according to CareerBuilder. CareerBuilder points out that “networking” and “relevant work experience” can help a graduate find employment.

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Moving Home or Moving Out?

For those who can’t find a high-paying job, housing prospects may be limited. reports that entry-level salaries are the top reason for graduates to move back in with mom and dad. For those entering the job market, the largest portion of their paycheck will go toward housing costs.

By living with their parents, graduates can start paying off student loans. Paying down debt, especially credit card bills, should be a priority once a graduate has found employment. Moving home allows a recent graduate to save up money so that he or she can move out eventually.

Moving back home can be hard after living away at college. One recommendation from is to create a timeline for how long to live at home and set a date for moving out.

A report from Twentysomething  Inc, referenced by the Huffington Post, showed that 85 percent of  2011 graduates will move back home. The Huffington Post notes that these same graduates carry “historic amounts of student loan debt — or an average of $27,200 for graduates that borrowed money.”

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Economic Downturn

Millennial Momentum: How a New Generation Is Remaking America, written by Michael D. Hais and Morley Winogard, investigates how the Millennials are changing everything, from education to the workplace to politics through their beliefs and practices. The authors of the book see today’s graduates in a situation where they must have a college degree, but they also face difficulties paying back what they owe.

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Paying Back Student Loans

What does the future hold for today’s graduates? The Projecton Student Debt showed that more than two-thirds of graduates had about $25,000 in debt from student loans. These same students face a 9.1 percent unemployment rate, the highest in recent history.

The Project on Student Debt reported that the number of students who default on their loans has increased sharply. But for those facing debt, if graduates continue their education, they can defer student loans.

What Does the Future Hold?

Andrew Sum, an economist from Northeastern University, said that “we’ve still got a really long way to go until we restore things back to the way they used to be.” Sum, interviewed by a Huffington Post reporter, called it “the war against the young,” as college students are forced to move back home after graduation. Drawing on data from the Bureau of Labor Statistics, Sum went on to say that almost 13 million young Americans are “unemployed, working part time, or working at a job that doesn’t require a college degree.”

5 Food Brands that Couldn’t Manage Debt

Ever wonder what happened to your favorite food brand from childhood? While some companies manage their business just fine, others succumb to the pressures of debt and end up folding, leaving consumers without that desired treat . . . at least for a time. In most cases, companies do restructure while under the protection of Chapter 11 and continue to operate, making a comeback. However, as you will shortly see, returning from bankruptcy is no guarantee that things will work out the second time around. Here are a few of the companies that have recently gone out of business or will be bankrupt shortly.

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1. Hostess®

The popular Twinkie manufacturer is in trouble . . . again. In 2004, Hostess filed for bankruptcy but managed a comeback in 2009. Unfortunately, the comeback wasn’t to last, and the sweets company is in the weeds again.

Where did Hostess go wrong? The company is deeply in debt, owing the Bakery and Confection Union Fund the most, more than $994 million. Dozens of other creditors are also waiting for payment. It’s looking like they won’t receive it, however, with Hostess™ filing for Chapter 11 for the second time in a decade. Twinkie sales were down by 2 percent in 2011, a drop the company attributes to more people opting for healthier foods.

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2. Mrs. Fields®

Everyone knows and loves Mrs. Fields the cookie company, but in August 2008, that popularity didn’t help when the company filed for bankruptcy with $196 million in debt. By October, the popular cookie maker was back on the market. While the main company was undergoing all these financial changes, franchisees continued as normal.

In 2011, Mrs. Fields faced a second bankruptcy and focused on restructuring the company to avoid this possibility. With the support of major shareholders, the company hopes to make out-of-court changes to the financial situation and ensure that there is no future Chapter 11.

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3. Dippin’ Dots®

In 2011, Dippin’ Dots filed for Chapter 11 bankruptcy protection, following a long, drawn-out battle with the company’s principal lender. Dippin’ Dots produces small dots of ice cream, specially frozen with liquid nitrogen to create tiny balls. The company is a franchise and has over 140 locations throughout the nation.

The problems started when the economy plummeted and no one wanted to buy the ice cream dots, which cost a few dollars per cup. With sales dropping, debt rose, and Dippin’ Dots ended up owing $12 million. The majority of the debt was to Regions Financial Corp., which pressed for foreclosure, prompting the ice cream manufacturer’s bankruptcy.

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4. Friendly’s® Ice Cream

Ice cream companies seem to be faring poorly in today’s economy, perhaps because of the nonessential nature of the sweet stuff. Friendly’s was another company that filed for Chapter 11 in 2011, and while it had almost 500 restaurants, more than 60 of those were closed due to debt-related issues, in an attempt to restructure the company and make it more viable. Friendly’s managed to get a hold of $70 million in debtor-in-possession financing, which was hoped to help the company make a comeback.

There is promise for the future, however. The company is managing its remaining locations and will be cutting staff to keep costs lower this time around.

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5. Forward Foods, LLC

In 2009, the maker of Detour® energy bars ended up filing for Chapter 11 protection with $25.4 million of debt. The main reason the company found itself in such dire straits was the fact that the majority of the energy bars produced included peanuts from the Peanut Corp. of America, which allegedly had tainted product. Forward Foods was forced to recall potentially contaminated energy bars, destroying around 75 percent of sales. The end result? A company unable to handle the large amount of debt in the face of such a setback.

The Peanut Corp. of America recalled all peanut products that originated from its Texas base after a salmonella outbreak was reportedly linked to the products. Hundreds of food companies received the supposedly tainted peanuts and had to recall their own products, including all peanut-based Detour bars.

All five of these food companies have had problems with debt, and while they may make a comeback after filing for Chapter 11, Hostess proves that this isn’t a guarantee of success. Like many companies that end up bankrupt, unless these organizations change their ways, they will simply end up in the same position again. A second bankruptcy is really not what any company wants to deal with, as it could end up being the death of them.

*The company, product and service names used in this article are for identification purposes only. All trademarks and registered trademarks are the property of their respective owners.

Single Parent’s Guide to Emergencies: Prepare Before It Happens!

There’s no doubt that being a single parent comes with its challenges. Taking care of kids, working a full-time job, and trying to find any time for yourself can be extremely difficult to manage. One way to ease stress is to make sure you’re fully prepared for any sort of event. Planning ahead for potential emergencies will give you peace of mind and minimize your worry. Here are some of the precautions you should take.

Create Emergency Contact List

Because you’re a single parent, working is necessary in order to afford food, clothing, and other necessities both for yourself and for your children. When you’re gone, your kids will be taken care of by someone else (if they’re young). Make sure these people, whether they’re babysitters or daycare employees, know exactly what to do in case of an emergency. Include the following in your list:

  • Your contact information
  • A nearby relative’s contact information
  • A neighbor’s contact information
  • Police department’s number
  • Fire department’s number
  • Doctor’s number
  • Dentist’s phone number
  • Health insurance information

If your child stays at a daycare, the center will probably have a list of emergency contacts, but make sure to give them your work number, cell phone number, and another trusted adult’s number.  Be sure to make a list for yourself that includes these numbers and the caregivers’ numbers, as well.

Compile a First Aid Kit

If you want until your child falls, gets sick, or somehow injures himself or herself, you’ll be panicked trying to run out and buy the necessary first aid materials. It’s very important to plan in advance for this type of mishap so that you can remain calm and help your child in his or her time of need. The best way to do this is to create a first aid kit. Include the following items (which are just a few of what you need in total):

  • Adhesive bandages (various sizes)
  • Antibiotic ointment
  • Hydrocortisone cream
  • Adhesive tape
  • Aspirin
  • Scissors and tweezers
  • Instruction booklet
  • Thermometer
  • Antiseptic wipes
  • Compress dressings

The Red Cross has a full breakdown of what you should include. Whether you buy one or create your own, make sure it includes these components. Also have more than one so you can have a kit in your house and a kit in your car.

Budget for the Month

Because single parents carry all of the responsibility in a family and provide the sole source of income, there’s a lot to consider when it comes to budgeting. However, it’s extremely important to budget in order to be ready to pay off bills, avoid debt, and steer clear of any sort of financial crisis. When budgeting, consider the following spending categories (on top of the general ones):

  • Day care/babysitting
  • Medical bills
  • Food
  • Emergency savings
  • College savings
  • Bottles, diapers, toys, etc. (if the child is young
  • School supplies, allowance (if the child is older)

These expenses are on top of typical bills like rent/mortgage, electricity, health insurance, car insurance, etc. Keep track of your expenses so you’ll be able to see what you can afford to cut back on.

Establish a Fire Escape Plan

Because you might be leaving your kids home with a babysitter, it’s important to have all of your safety bases covered. The possibility of a fire is a scary one, but it’s one that needs to be addressed and prepared for. Sit down with your children (and babysitter) and discuss a fire escape plan including these components:

  • Map out the floor plan of your home
  • Indicate the location of every door and window
  • Mark off two ways to escape each room
  • Decide on a family meeting place outside

Once you have the plan established, practice the escape routes both during the day and at night. Make sure that everyone meets outside at the designated meeting place, and see how long it takes. Also, go around and check that windows and doors can be easily unlocked and opened in case of an emergency.


It’s impossible not to worry — it’s a parent’s job! But you can significantly lessen your stress with some precautionary action. Take steps to prevent any other situations you think could surface, and buy a home security system if you want that extra level of protection. If you take the above actions and make sure you have a plan for every scenario, you’ll rest much easier and feel focused, secure, and confident.