Graduation test: budgeting today

'They need to know what their expenses are going to be if they accept a salary.'

Figuring out a personal budget is a relatively easy process. More

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Graduation test: budgeting today

'They need to know what their expenses are going to be if they accept a salary.'

COURTESY TOM MAGUIRE NEW REALITIES: The class of 2012 at Providence College's commencement exercises in May. A recent study shows Rhode Island graduates carry an average debt load of $26,340.
Posted 6/25/12

Figuring out a personal budget is a relatively easy process.

Net income minus expenses equals disposable income. But what happens when that bottom line is close to another number: zero.

“[Students] are definitely shocked [by] basic budgeting scenarios they might see as a recent grad in an entry-level position,” said Sheri Ispir, director of experiential education and career services at Johnson & Wales University in Providence. “They just can’t believe it.”

Today’s college graduates are undoubtedly entering a workforce that remains in less than optimal financial condition.

In 2010, the most recent numbers available, the unemployment levels for new graduates was at 9.1 percent, according to the Project on Student Debt, an annual report put out by the Institute of College Access and Success, an advocacy group that operates in Oakland, Calif., and Washington, D.C.

That same study reported that the class of 2010 faced an average student-loan debt of $25,250 upon graduation and that locals were among those with the highest bills. Rhode Islanders carried an average debt load of $26,340, while Massachusetts residents were saddled with some $25,541.

The Federal Reserve Bank of New York reported last month that student-loan debt has increased by $293 billion since the peak of household debt in late 2008, while other forms of debt fell.

“The cost of education is certainly a growing concern and issue for students and our customers,” said Brendan Coughlin, president of education finance at Citizens Financial Group. “By the time they get to us, most families have thought through the cost side. We try to be helpful in the financing side [and let] them know what their options are.”

Student-loan payments are only one part of the financial world new graduates face.

In order to pay them, of course, graduates need to find employment. But in a difficult job market, workers with new degrees can carry a sense of optimism that might hinder them, local school career counselors say.

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