As thousands of African American students head off to college this month, some will be making financial decisions for the first time in their lives.

Not all will choose wisely, especially when it comes to debt.

According to a report by the N.C. Institute of Minority Economic Development, black students in America are saddled with about $7.5 billion in debt. That's 16 percent of the nation's total undergraduate debt, though black students make up only about 12 percent of the undergraduate population.

Students who attend the nation's 104 Historically Black Colleges and Universities bear a disproportionate chunk of that, with about $941 million of debt. In North Carolina, the state with the highest number of HBCUs, student loan debt alone totals about $570 million.

La-Tasha Best-Gaddy, director of financial education & training for the institute, said college debt can be especially crippling for black students, whose parents tend to have less household wealth than their white counterparts. According to the U.S. Census, white families in America average about $80,000 in net worth, versus $7,500 for blacks.

"It is estimated that it could take a person two decades to repay student loans," said Best-Gaddy. In addition, she noted, student loan debt cannot be erased by bankruptcy.

Two areas where students commonly fall into financial trouble involve predatory lending products, such as high-interest credit cards, and borrowing the maximum amount offered for student loans, even if it exceeds the amount they need to cover education expenses.

"College students think that the net loan proceeds or 'refund check' is free money," said Best-Gaddy. "We must dispel that myth and educate students on the reality of these funds and the long-term costs."

Best-Gaddy said black parents especially must do more to educate their children about the pitfalls of excessive debt. She offers the following tips:

* Pull a copy of the student's credit report and discuss with the student how debt can affect their lives.

* Establish and maintain a positive banking relationship. Explain how to balance a bank account and create a monthly budget. The bank or credit union you choose should provide free checking, online bill paying and have many ATMs in your area so the student can avoid ATM fees.

*Avoid credit cards, especially those marketed on college campuses. Research various credit cards, comparing terms and interest rates. Parents should assist the student in selecting the appropriate card.

* Read all financial documents before signing or registering for free items on the college campus.

* Live within your financial means. Don't spend a fortune decorating an apartment or dorm room. Go to thrift stores, garage sales and check classified ads. Keep a savings account for financial emergencies such as vehicle repairs and medical expenses.

*Rent wisely. Understand that the person whose name appears on the lease and utilities is liable for the bills. If you have roommates, ask your landlord to put more than one name on the lease so the responsibility can be shared.

* Guard against identity theft. Remember, there may be a high number of roommates and guests going in and out of your child's dorm rooms. Be careful about leaving documents with his/her Social Security number, bank account numbers and other personal information out in the open.

*Avoid paying full price for textbooks. At campus bookstores, write down ISBN numbers and prices for both new and used books and use that information to shop online. Compare prices at such sites as Valorebooks.com, collegeswapshop.com, Amazon.com, Barnes & Noble, eBay, Varsity Books, efollet.com and iChapters.com. Also, BestBookBuys.com is a good place to do some comparison shopping. And remember to sell the books back as soon as the semester ends in order to get the best value for them.

Click here to download a copy of the institute's report, entitled Removing the Millstone: Student Debt and the Growing Wealth Gap.

Vicki Lee Parker is a personal finance columnist in Raleigh, N.C. She can be reached at vickileeparker@gmail.com or (919) 877-5719

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