Sending your children off to college can be a joyous occasion, but as all parents know, it can also be a bit terrifying.
From signing lease agreements, to applying for student loans, to paying for utilities, to dealing with landlords, college students will encounter a wide range of unfamiliar legal interactions. There are many legal obstacles awaiting students after they leave home and go to college.
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Legal Templates has provided this infographic with the five most common legal scenarios students will encounter during their time in college.
Legal Templates’ top five tips to keep college students legally prepared:
Tip #1: Carefully read the lease agreement before you sign it.
If your name is on the lease, you are responsible. Answer these questions before you sign a lease agreement:
a. When is the rent due?
b. Is there a security deposit?
c. Are there late fees?
d. Will you be responsible for any utilities?
Going away for college is the first time many young people will live away from their parents. Although most incoming freshmen are required to live on-campus, returning students often have the option of living off-campus. This involves signing a lease agreement and possibly putting their name on a legal document for the first time.
Before you tie your name to a legal document, it is important for you to understand the responsibilities that are involved. The consequences of not knowing all of your responsibilities can result in paying late fees, unexpected utilities, or getting hit with a huge security deposit you weren’t prepared for.
Tip #2: Calculate a budget for utilities that you and your roommates can afford.
Utilities are under one name, even if you split the bill with others. The most important thing is to always pay your bills on time to avoid paying late fees. The best way to do this is to pick roommates you can trust and rely on.
Although you both might want high-speed internet and satellite TV, you have to make sure the essential utilities are easily covered first such as water, electricity, gas, and garbage. Are any of these included in the rent? Before signing up for extra monthly expenses, test your budget the first month to be positive you and your roommates can afford it.
If the utilities are under your name, then the responsibility and consequences fall on you if they are not paid on time. Negative records from late payments or collection accounts can damage your credit report and even stay on your record for up to seven years, making it harder and more expensive for you to borrow money in the future.
Tip #3: Beware of credit cards.
Bad credit will follow you long after graduation. In your first few weeks of school, there will most likely be tempting promotional campaigns to sign up for credit cards around campus that you should be wary of. No matter what credit card companies are offering, you need to make sure to read through the contract to fully understand the legal commitment you are about to make.
Although the contract will be long and confusing, find out what the interest rate would be and if there is an annual fee. It’s a good idea to ask someone you trust to read it with you. If you decide to get a credit card, ensure you always pay your bill on time.
“Paying your credit card and other bills in full and on time will help to establish good habits and more importantly good credit,” said Yang. “Failing to do so can damage your credit score for years, dig yourself into a hole of debt, and may even lead you into a courtroom.”
Tip #4: Make a plan for borrowing your student loans before college begins and revisit this conversation each time you need to apply for more.
Need student loans? Read the fine print, start saving immediately, and learn how to budget.
Currently, the average college graduate leaves school over $37,000 in student loan debt. If you want to avoid being a part of this statistic, find the answers to these questions before applying for the student loan:
a. How can you spend the borrowed money?
b. What are the interest rates?
c. What are the repayment options?
You should also make sure you are getting student loans that you can defer in cases of unemployment or if you decide to return to school to further your education. The more flexible your loan repayment options, the better off you will be.
Tip #5: Create a promissory note if you borrow money for college from your family.
Taking out student loans is not the only way that many students pay for their tuition. Often, young people are able to borrow money from their family. The best way to do this is by creating a promissory note or IOU form with the family member who will lend your money. By doing this, you can both discuss and agree on the terms of the loan before you accept.
If you decide to borrow money from a family member, make sure to cover these questions when you are creating a promissory note:
a. When do you have to repay the loan in full?
b. How much will your payments be, and how many times can you change this amount if you run into hard times?
c. In what form does your family member prefer you to make your payments?
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