BY ETHAN FORMAN
---- — DANVERS — Seniors learned the hard lesson that their student loans are going to cost them big time someday during a Reality Check Fair held Monday in the Berry Building of North Shore Community College.
“Student loans are huge right now,” said Kathryn Gadzera, a Danvers High business technology teacher who helps with the financial literacy fair, which is organized by People’s United Bank. “So that is what is tripping up a lot of them, now, because the student loans are so much.”
With the help of Danvers High staff and more than 70 volunteers, more than 200 students took part in a life-size version of The Game of Life. The kids pretended they were 25 years old and venturing out on their own for the first time.
Now in its seventh year, Reality Check is a required program that takes some preparation beforehand. About 200 People’s United employee hours go into planning it. In December, students picked an occupation during a one-hour introduction. Students also attended a two-hour presentation last week on credit scores and how to obtain a credit report.
For their chosen occupation, they were given a real-world salary with taxes and Social Security deducted. They were also given a randomly assigned, made-up credit score. They visited various booths to buy furniture, find housing, pick up groceries, enroll in a health insurance plan and decide whether they can afford cable TV, among other things. Their goal was to break even.
“Some students are really blown away when they realize all the things they have to balance,” Gadzera said.
Many students wrestled with student loan debt, Gadzera said. In the simulation, students rolled dice to see how much they would have to pay and whether they would win any scholarships.
“The student loan is the high-dollar figure for the students this year,” said Kevin Noyes, the community development and community reinvestment act officer for Massachusetts with People’s United Bank, and Reality Check’s coordinator.
“It’s thrown a lot of kids off, actually, on their budget,” Noyes said.
“I thought I was doing pretty good until I hit the student loans,” said senior Joseph Manson, who struggled to get by on a criminal investigator’s salary of $37,960. He netted $2,280, but by lunch, his checking account had a balance of a negative $235. He was in the red $240 in his savings account. He had yet to use his credit card.
“He’s in debt pretty good,” Gadzera said.
A budget buster for Manson were student loans of $341 a month. During the role-playing session, Manson had attended the University of Massachusetts Lowell, but paid full tuition with no scholarships.
“I made sure to go to the things that were essential to live,” Manson said. “Like transportation, food, clothing. But then I also went to the investments to try and make some money, and at first I invested in Apple. The stocks went down, but then, an hour later, I went back, and they went up.” Investments netted Manson an additional $60.
Noyes said he has seen fewer students using credit cards than at past fairs. Many are also staying with low-end transportation.
Students also had to buy health insurance, as it’s mandatory in Massachusetts.
“When you work with the kids, depending on what kind of salary they make, they begin to quickly understand whether they can afford to buy dental (insurance),” said Jane Rizzo, who works in the appraisal department for People’s United and manned the insurance booth at the fair.
Richard Bettencourt, a Danvers mortgage broker who volunteered in the housing booth, said students did what they could to cut costs, with many sharing expenses and rent in a two-bedroom apartment.
“We don’t do enough society-wise for our students, the seniors in high school, to prepare them for the economic challenges they are going to face when they graduate,” Bettencourt said.
Periodically, students had to visit the “Reality Check” booth, where they might pick up $1,200 bonus or an iTunes gift card, or face an unexpected bill like a car repair.
Every student also had to visit the “Fun, Fun, Fun” booth filled with financial distractions.
“We are trying to teach the kids not everything is a good sale,” said Fun, Fun, Fun “salesperson” Anthony DiSalvo, who works in marketing for People’s United. He strummed a guitar and tempted students with concerts, motorcycles and trips.
While some students just got haircuts, others like Nicole Pszenny and Alicia Tinkham insisted on VIP Bruins tickets.
Tinkham’s job as an elementary school teacher earned her $24,000 a year, while Pszenny made $20,000 as an artist.
“I’m doing pretty well right now. Earlier on, it got a little messy,” said Tinkham, who had to trade in her car to save money. Despite some trade-offs, like having to buy cheaper furniture, Tinkham said: “I can’t pass up on Bruins tickets.”
Tinkham, who took Gadzera’s personal finance class last semester, said many students don’t realize the reality of paying bills in the real world.
“It gives you the worst-case scenario, though, and it prepares you,” Pszenny said of Reality Check.
Staff writer Ethan Forman can be reached at 978-338-2673, by email at firstname.lastname@example.org or on Twitter at @DanverSalemNews.