Student Credit Card Debt Reaches Record Highs
As if soaring tuition rates weren’t bad enough, students are now adding to that by tallying record levels of credit card debt. A new study that was just released yesterday by Sallie Mae, which is a company that is in the business of financing college students, shows that the average college student now carries $3,173 in credit card debt as of 2008.
This is the highest level that student credit card debt has reached since Sallie Mae began tracking such statistics in 1998. The last time the study was conducted was 2004 when student debt was tabbed at $2,169.
Not surprisingly the study shows that the higher the grade level the greater the debt. That certainly makes sense when you consider the fact that as college costs grow students must find ways to pay for them. And of course, while students are in school they are not out earning money to pay off debts that have already been accumulated.
In fact, credit card debt is up 41% since 2004 for college seniors, compared to a 27% rise for college freshmen. To break those numbers down further, the average college senior’s credit card debt is now $4,100 and the average freshman’s credit card debt is $2,038.
The study was derived from data collected on March 2008 from the various credit bureaus. The economy has grown worse since then and that will more than likely mean that 2009 will show even greater debt for students.
Adding to the problem is the fact that during this current credit crisis many lenders are now pulling back on private loans which of course makes it more difficult for students to pay for college. Federal student loans are still available however, and rather easily attained.
Basically what all this means is that credit cards are by default, the lender of last resort. There is a movement afoot that would sharply lower the interest rates on current student loans and even some calls to forgive student loans altogether. Only time will tell if any of these ideas come to fruition.
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