Many students opt to use credit cards to finance some or all of their living expenses and tuition while in college. While it might seem dubious to some, living off of credit cards is a necessity for many, given the steadily-rising cost of a post-secondary education.
According to administrators at the University of California at Fullerton, they see more students drop out because of credit card debt than due to academic failure.
A study done by Sallie Mae two years ago revealed the following to be true:
Two-thirds of survey respondents said they had frequently, or sometimes discussed, credit card use with their parents. The remaining one-third who had never or only rarely discussed credit cards with parents were more likely to pay for tuition with a credit card and were more likely to be surprised at their credit card balance when they received the invoice.
The report went on to say:
80-four per cent of undergraduates indicated they needed more education on financial management topics. In fact, 64 per cent would have liked to receive information in high school and 40 per cent as college freshmen.
While the Credit CARD Act of 2009 changed the way credit card companies and colleges market credit cards to student, preventing anyone under the age of 21 from obtaining their own card without a co-signer or proof of an income with which to pay off debts, more needs to be done to teach America’s next generation how to handle credit responsibly.
An upcoming event at Sullivan Hall in New York City, sponsored by the Student Credit Card Education Initiative that is for students, by students, should help some. On Sunday, Aug. 28, the MUSIC FOR CHANGE: STUDENTS UNITED FOR CREDIT EDUCATION event is scheduled to begin at 6 p.m. The event, which will feature live music, is organised and promoted by current college students and recent graduates in order to sound awareness of the growing problem of credit card debt among the demographic. It will also bring to light the ever-increasing need for colleges and universities to provide adequate personal finance education for students.
In today’s economy, in order to be able to buy on credit one must first establish some credit history…which can’t be accomplished without having access to said credit. Students should be mindful of building good credit while they are still in school, as their credit score will begin to impact their future, nearly the moment almost they slip out of their cap and gown.