According to last year’s national study by Nellie Mae, the average college student charges over $2200 for education expenses on the their credit cards, including tuition. An affiliate of Sallie Mae, Nellie Mae analyzed credit cards used by student loan applicants and reported during the recession that students used their cards more than ever before.
According to the report:
- Tuition on their credit card – up 24% since 2004 when the study was last conducted.
- Textbooks, school supplies, or other direct education expenses, – up 7%
- Direct education expenses charged were $2,200, -over double the $942 five years ago.
- One or more credit cards – up 8%
- On average, 4.6 credit cards, The average (mean) balance grew to $3,173, higher than any of the previous studies. Median debt grew from $946 in 2004 to $1,645.
- Balances paid monthly -Only 17 %
- Family paying 1 %
- Incurring finance charges- 82 %
- Need for financial education and management –84%.
- Preferred High School classes—64%
- Requested College seminars or classes -40 %
There is shrewd wisdom in using a bank’s money for a month while your own stays in your account. This is a learned skill that requires strong supervision from advisors and parents at the college level. Issuing credit cards without information on responsible handling of debt simply sets our young professionals up to fail. Failing in finances has a longer recovery time than failing a college course. They may survive in society without many college courses, but they will always struggle in life if they are not given opportunities to master a sensible spending plan.