A recent study conducted by student loan giant, Sallie Mae, concluded that a large percentage of college students have accumulated an obscene amount of credit card debt in order to pay for college credit hours. The study included approximately 1,200 college undergraduates across the country with ages ranging from 18-24.
In a report presented to CNN, Sallie Mae stated that the typical undergraduate will have an average debt load of about $3,173, while seniors preparing for graduation may have more than $4,100 in credit card debt.
According to a survey conducted by the lender, currently enrolled freshman are carrying almost triple the debt they were just five years ago, a rise from $373 to $939. More disconcerting is that that more freshmen no longer have zero balances on their card. In 2004, about 69% had zero balances; today, that number is only 15%.
It is clear that a primary factor for this change is the rising costs of higher education. In lieu of personal or private loans, which were either not readily available or the student felt uncertain about the lender, many went with their credit cards to make payments on tuition and other college expenses.
Besides escalating education costs, the other main factor was personal responsibility for the current state of their credit card debt. Sallie Mae estimated that about 60% of students showed general surprise about size of their card balances. The other 40% admitted that the level of debt was due to their mismanagement of funds.
One student interviewed expressed a conservative view of card use when he said that he used his card for “food, gas, and occasional fun.”
The student said that among college students, talking about personal financial responsibility and not spending what you don’t have were not very popular topics.
Unfortunately, such fiscally-responsible students are harder to find.
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