Artist concept of a young adult sitting inside of a giant bear trap. College Financial Pitfalls

Financial Pitfalls for College Students

Financial Education and Fraud Prevention Tips

College is an exciting time filled with new experiences. For many students, it is also a crash course in managing money for the first time. Without the right guidance, it’s easy to make financial mistakes that can follow a student far beyond graduation.

Fortunately, many colleges now offer financial wellness centers, online courses, or peer counseling sessions for financial education. Taking advantage of these resources can equip students with the knowledge and confidence to make informed financial decisions.

Here are a few of the most common financial pitfalls for college students and how they can be avoided.

A student’s first credit card may feel like the path to financial freedom, but it can also be a roadblock. Many students open multiple cards without understanding interest rates or repayment terms. According to a 2023 U.S. News & World Report:

  • 35% of students carry a credit card balance month to month
  • 15% have missed a payment in the past year

Smart tip: Stick to one card, pay off your balance in full each month, and never borrow more than you can afford to repay. This builds your credit without racking up debt.

Budgeting isn't the most glamorous part of college life, but it's absolutely essential. Without clear financial oversight, students can easily overspend on discretionary items such as food delivery, entertainment, and transportation. A survey conducted by Everfi and AIG in 2022 found:

  • Only 43% of students track expenses
  • Less than 40% maintain a monthly budget

Smart tip: Use apps or a spreadheet to keep your finances in check. Knowing where your money goes is the first step to financial freedom.

Student loans are often necessary, but borrowing too much can lead to regret after graduation. Many students accept the full loan amount offered without assessing actual needs or understanding the future repayment burden. It is important to understand the differences between federal vs. private loans and subsidized vs. unsubsidized interest before committing to a loan. Understanding the difference between subsidized and unsubsidized loans is also key to minimizing unnecessary interest accrual. There are several websites designed to compare loan options and repayment plans that can help to make the process easier.  According to 2024 data provided by the Federal Reserve and National Association of Student Financial Aid Administrators:

  • The average loan balance per borrower is $37,090
  • Nearly 60% of college graduates say they would make different choices about borrowing if they could do it over again

Smart tip: Only borrow what you truly need. Prioritize grants, scholarships, and work-study programs before turning to loans.

Students are increasingly targeted by fraud and scams, especially online. Common scams include phishing emails posing as university officials, fake job postings, and fraudulent scholarship offers asking for “processing fees”. The Better Business Bureau reported in 2023:

  • Students aged 18–24 are the second most targeted group for online scams
  • The average loss per incident is $150

Smart tip: Never share personal info via email or public Wi-Fi. Use strong passwords, enable 2-factor authentication, and check your credit report regularly for suspicious activity.









In conclusion, college is not only a time for academic growth but also an opportunity to develop essential life skills, including financial responsibility. Investing in financial education is one of the most effective ways students can protect themselves. By avoiding common financial pitfalls and staying informed about fraud prevention, students can lay a solid foundation for a secure financial future.

About Union State Bank: Founded in 1908, Union State Bank has banking locations serving communities of Arkansas City, Newton, Udall, Winfield, and Wichita in Kansas and in Bartlesville and Edmond, Oklahoma. Union State Bank offers a full range of electronic, deposit and cash management services, as well as business and agriculture, commercial real estate, construction, mortgage, residential and consumer loans. Member FDIC. Equal Housing Lender, NMLS# 412388