Sallie Mae: Students Use Credit Cards More to Pay for Education
Students in higher education are using their credit cards at record levels to pay for their schooling, reports a study out from Sallie Mae this morning.
Students charged an average of $2,200 in direct eduction expenses -- such as tuition -- on their high-interest-rate credit cards last year, according to the study from Sallie Mae, the student loan giant.
Last year, 30 percent of college students put tuition on their credit cards, up from 24 percent in 2004, the study reports.
In 2004, students put an average of $942 worth of tuition on their credit cards, which could be a function not only of rising credit card use but also rising tuition.
“Too many students are at risk of overpaying for college by pulling out credit cards to pay for textbooks or even part of their tuition bill, instead of using less expensive financial aid to cover these items,” said Marie O’Malley, director of consumer research for Sallie Mae and author of the study.
Here's the most terrifying statistic from the Sallie Mae study: On average, students have 4.6 credit cards(!), and half of college students had four or more cards.
The average balance carried by a U.S. college student is $3,173, higher than any of the previous studies.
-- Frank Ahrens
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By
Frank Ahrens
|
April 13, 2009; 11:13 AM ET
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| Tags: Sallie Mae, college tuition, credit cards
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Posted by: Garak | April 13, 2009 4:28 PM | Report abuse
The never ending debt trap!
Students avoid it at all costs. I'm 40-something still paying off student loan debt.
Posted by: oknow1 | April 13, 2009 4:37 PM | Report abuse
Garak, what are you thinking? What kind of education promotes walking away from your responsibilities? Education costs enough without a bunch of deadbeats avoiding the bills they chose to rack up. Charging ones education on a credit card is absurd. Where's Michelle Singletary? She needs to scold you on this.
Posted by: shadowshopper1981 | April 13, 2009 4:38 PM | Report abuse
Its good to pay with a credit card if you have the money because of the rewards you can get from it. Im in college and they dont let me pay by credit card so i miss out on getting things like frequent flyer miles.
Posted by: dsm12321 | April 13, 2009 4:39 PM | Report abuse
you have some seriously messed up logic, credit is better than student loans?? are you saying everyone needs to file bankruptcy after college?
how about taking some financial responsibility and use a low interest student loan, get a job and pay it off?
looking for the easy escape from debt is what is screwing up this economy, people should be spreading the word about finicial responsibility, not how to cheat the system and get bailed out.
Posted by: vennd | April 13, 2009 4:39 PM | Report abuse
How do you know they aren't just charging their tuition in order to get cash back, or frequent flyer miles? There sure are a lot of assumptions in this "study". And the quote about buying textbooks with a credit card instead of using "less expensive financial aid", coming from Sallie Mae, is a red flag that the cited study is nothing more than a promotional stunt for SLM itself.
Posted by: pxl4 | April 13, 2009 5:03 PM | Report abuse
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It's better to charge the bills on plastic than to take out student loans. Credit card debts are dischargeable in bankruptcy, while student loans are not.