As any recent college graduate can tell you, it can cost serious money to attend college in the U.S. these days. And despite the recession and tightened lending standards in many markets, institutions offering student loans have shown little sign of slackening the pace at which they offer money to young scholars.

One reason for this is that student loans cannot be discharged in bankruptcy, meaning that student lenders have little reason to deny a borrower money – because even in the bankruptcy courts, that borrower will have little chance of being able to discharge the debt, meaning she is almost guaranteed to pay it back, no matter how long it takes.

But, as many grads are finding out, that can be extremely hard to do when you’re stuck without a job after graduation.

Financial Literacy on the Right End of Borrowing

So what can be done to address this problem? One community college in Virginia has reportedly taken steps to give its students better odds of staying financially healthy after college, according to USA Today. Here’s how:

  • Need for improved student financial education: Worried about the high cost of college and the difficult job market many graduates faced, officials Tidewater Community College took action by implementing strict financial education measures for potential borrowers.
  • Budget sheets: Tidewater has apparently begun requiring completion of a budget sheet of all students interested in applying for loans. Students must detail their current expenses and current income and calculate their disposable income.
  • Projection sheets: Then, it seems, the college makes students fill out budget sheets that project their future income (based on the career they’re pursuing) and expenses to see whether they will have sufficient disposable income to make student loan payments.
  • Denial of funds for incomplete forms: To ensure that students are taking the budgeting worksheets seriously, college administrators reportedly deny loan funding to those who do not complete the sheets and review all sheets to ensure that students are working within realistic expectations.
  • Yearly renewal: Just in case the message of fiscal responsibility is at risk of fading in students’ mind over the course of the academic year, college officials require students to complete the process every year they wish to apply for loans.

This move comes at a time when, according to sources, other community colleges have begun advising many students against taking on student debt.

And the trend seems to be a positive one, especially at a time when the cost of college is rising steeply, public officials are calling into question the financial viability of degrees from for-profit universities, and the job market is difficult to break into even for those with post-secondary degrees.

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