UNL center focuses on helping students pay back debt

With worries of homework, tests, weekend plans and finding food, students tend to push away another worry that is far more important: credit-card debt.

Having credit-card debt can have negative impacts in the future, but it is avoidable. It is important to keep credit-card debt under control or to try to avoid it all together.

Students struggling with credit-card debt can take a deep breath and relax because there are some things they can do.

Erin McDermott, program coordinator for the Student Money Management Center at the University of Nebraska-Lincoln, said sitting down and creating a debt-repayment plan is vital to paying off or reducing debt. Students with credit-card debt should prioritize which expenses to pay off first.  

"Start with the smallest debt with the highest interest rate," McDermott said.

Targeting one debt to pay off rather than spreading the money around is a better strategy to use for reducing debt because it will increase motivation and the likeliness of sticking to a repayment plan, said Kathleen Prochaska-Cue, associate professor and faculty adviser for UNL's Student Money Management Center.

Creating a realistic, affordable budget is a way to avoid creating credit card debt, said Angela Kaipust, assistant vice president of Wells Fargo Regional Banking Communications – Nebraska, Iowa and Illinois,

She said students should avoid having monthly credit card payments that exceed 10 percent of monthly (after-tax) income.  

If a student already has debt, Kaipust advises to take a step back and look at all debts and expenses.  

"Get serious about your goals and find a way to pay the max on your loans and cards each month," she said. "Even if you're paying only $10 above the minimum-required monthly payment, you can make huge gains in cutting repayment time and reducing finance charges."

Talking to a banker is always an option to help students get started paying off debt.

Kaipust recommended students speak with a banker to come up with a repayment plan or loan-consolidation options, where multiple debts are combined into one that requires a larger monthly payment.

Students unable to make the minimum payment on a credit card should contact the provider who may be able to work out a repayment schedule, she said.

UNL has resources on campus for students looking to handle their finances responsibly. The Student Money Management Center, located in Room 237 in the Nebraska Union, offers money management mentoring sessions by appointment. The hours are 8 a.m. to 8 p.m., Monday through Friday and noon to 6 p.m. Saturday and Sunday. For more information, visit www.unl.edu/smmc.

bethanyknipp@dailynebraskan.com