This week

• Feature —The true cost of credit cards
• Your turn —Important definitions related to scholarships
• Stay on track — A checklist of "to-dos"
• Take notice — Important dates
• All about AIEmail — Subscribe, suggest, review

Feature

The true cost of credit cards

What do you do when you want to buy something expensive, like a computer, new cell phone, or even a pair of designer jeans? As a high school or middle school student, you either depend on a parent to give the money, or you save the money you earn for long enough to buy the item with cash.

Now fast forward a few years. Picture yourself in college, living on your own, and going to class. You have a lot of responsibilities—homework, paying bills, and possibly a part-time job—but you also have a lot of freedom. How should you balance your social life with your education? Will you cook at home, or east most meals at restaurants? What clothes will you buy? Where will you choose to live?

As you can imagine, many of these decisions will have an impact on not only your education, but also your finances. Many college students spend beyond their means, and get themselves into trouble by using credit cards to buy everything from expensive items such as TVs and spring break vacations to everyday necessities like groceries. Before they know it, students are in over their heads. In 2004, the average college senior had over $2,800 in credit card debt (according to student lender Nellie Mae). Add that to an average student loan bill of nearly $20,000, and these students are handicapped right out the gate with a burdensome level of debt.

Calculate the cost up front

What can you do to avoid this situation? First, be aware of what buying on credit really costs you. Interest charges add up quickly. If you don’t pay off credit card purchases soon after making them, you’ll end up paying more (possibly a lot more) than the original price.

To help you get an idea of what your credit card purchases will really cost, AIE has created a True Cost Credit Card Calculator. The calculator allows you to enter the price of the item and your card’s interest rate. It then shows you how much interest you’ll pay and how long it will take to pay off the item if you only make the minimum payments. You can recalculate the bill with higher payment amounts to see how the interest and payment period change.

Check out the calculator (http://www.aie.org/managing-your-money/credit-cards/
true-cost-credit-calculator.cfm) and get a sense of what your future buying habits may cost you. It’s a sound investment of your time.

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Your turn

Important definitions related to scholarships

When you apply for college scholarships, you may run into terms that you don't understand. It's helpful to call the organization or business offering the scholarship and ask for assistance. However, in the meantime, here are some general definitions you might find helpful:

• Community service — An activity you perform, usually on a regular basis, without pay to benefit your community. Some scholarships may ask you to describe some of the community service activities you have been involved in to gain a better understanding of your interests, your commitment to your community, and your accomplishments.
• Departmental scholarship — An award specifically meant for a recipient who plans to major in a specific program of study.
• Full-time student — Generally, one who is taking a minimum of 12 semester or quarter hours per academic term (often about four classes) in schools with standard academic terms. Some scholarships are only available for students who are enrolled full time; others are open for both full-time and part-time students.
• Military scholarships — Usually refers to the Reserve Officer Training Corps (ROTC) scholarships available from the Army, Navy, Marines, and Air Force at many colleges and universities throughout the United States.
• National Health Service Corps scholarships — A program for students who pursue a full-time course of study in certain health profession disciplines and are willing to serve as primary care practitioners in underserved areas after completing their education.
• Student contribution — An estimate of a student's ability to contribute to college expenses based on income and assets.

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Stay on track

Checklist for this week

For freshmen

• Take an active role during class lectures. Ask questions and contribute to class discussions.
• Keep open lines of communication with your teachers. Give them progress updates on your studies and ask for help when needed.
• Remember, active participation can improve your grades. The more you show an interest, the more likely you will be given credit.
• Start to get comfortable speaking in class, in large groups, or in class presentations. Your confidence will build, and you will do better in future interviews for schools and scholarships.
• If you are shy, make a commitment to speak up at least once or twice a day in class. You'll find it more comfortable to participate in the future.

For sophomores and juniors

• It's time to take the PSAT. Make sure you register and get all the information necessary to take the test.
• When you receive your PSAT scores, you will also be given your test booklets. Review the items you missed and talk to your teachers if you don't understand why you missed the incorrect answers.
• When you practice for the test, make sure you monitor your time and adjust your progress to complete as much of the exam as possible.
• Don't get stuck trying to answer a single question. Mark the questions you can't answer immediately and come back to them later.
• Pay attention to the instructions on filling out the answer form. It can be very easy to lose your place and start marking answers in the wrong spaces.
• If you are having difficulty selecting the correct answer, but you can definitely eliminate one of the answers, make your best educated guess. By eliminating one option, you've already increased your chances of getting the right answer.
• Remember to take your calculator, extra new batteries, and a supply of reliable pencils to the test.

For seniors

• Keep working on getting good grades. It's tempting to slack off your senior year — but don't do it.
• You should be diligently working on taking your college entrance exams, preparing your college applications, and visiting schools when possible.
• Talk with your parents or counselor about who you should approach to prepare reference letters for you. Often, it's more important that you select a person who knows you well. A person with a high profile may not impress the school if that person doesn't know you well.
• Start thinking about where you'll be this time next year. If you plan on leaving home for college, you'll need to start thinking now about how to pay for the necessities — food, shelter, and transportation, among other things.
• Work on your leadership skills. Join clubs, run for an office, and get involved with community activities.
• Keep your family involved in your college and career planning. Share your progress over dinner, on the ride to or from work or school, or over a basketball game or trip to the mall.

For parents

• The season for "college nights" and college planning fairs has arrived. Stay involved. Make arrangements to attend these programs with your student.
• During the fairs, encourage your student to ask questions. Pick up information about schools and ask any questions you may have, but be careful not to monopolize the counselor's time.
• Have a quick five to ten minute chat with your student's high school counselor. Share ideas, talk about your students' progress, and ask them to keep you informed of any changes.
• If your senior student wants to go to college but isn't making an effort to get the information he or she needs, remind them that time is running very short. Get them to spend an afternoon or a Saturday morning calling admissions offices for information, researching on the Web, or e-mailing schools.

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Take notice

Important dates

To get more information on the SAT or SAT Subject Tests, access useful tools, or register, visit the College Board's Web site (www.collegeboard.com) or call (866) 756-7346.

To get more information on the ACT, access useful tools, or register, visit the ACT Web site (www.act.org) or call (319) 337-1270.

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All about AIEmail

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