DAILY LOBO new mexico
The Independent Student Voice of UNM since 1895
Study: Students slow to pay debt
THURSDAY January 29, 2015 | Volume 119 | Issue 91
De-evolution of student debt
By Moriah Carty Credit cards can be a blessing or a curse for college students. Those little pieces of plastic could develop a student’s credit score or they might lead to early financial distress. The key to finding the benefits, experts say, is solid credit management. While credit is important, a recent study conducted by The Ohio State University shows younger Americans have higher debt and are paying it off at a slower rate. The study stated that “a person born between 1980 and 1984 has credit card debt substantially higher than debt held by the previous two generations: on average $5,689 higher than his or her ‘parents’ (people born 1950 to 1954) at the same stage of life and $8,156 higher than his or her ‘grandparents’ (people born 1920 to 1924).” Monique Marsico, a psychology and Spanish senior, said she knows firsthand about the pitfall of going into debt. Marsico got her credit card because she wanted, as many students do, to build credit, she said. Marsico said the most important part about keeping out of debt is paying attention. Wells Fargo continuously raised her limit every time she got close to reaching her credit limit.
$ Freshman year median accrued debt:
Senior year median accrued debt:
$940
$4,100
The average undergraduate student carries $3,200 in credit card debt and the average graduate student now carries $7,800 in credit card debt, up 60% from 1998 according to Debt.org. graphic by Sarah Lynas, photo illustration by Kanan Mammadli
At the time she thought this was good, she said. Then she realized it was getting out of hand. Eventually, she cut the card. However, the debt is always there, she said. “It’s a scary feeling,” Marsico said. “Then paying it back with interest, it’s tough.” Anneliese Elrod, senior vice president of marketing at the New Mexico
Educators Federal Credit Union, said the union aims to train students during orientation so that all are aware of how to approach credit cards. “(Being a student) is the best time to try and build credit,” Elrod said. The credit union works with students to help them build credit in a way that will not send them into a pitfall as many credit cards can and do, she said.
This is typical of credit unions, she said. Since credit unions are owned by members, they are more likely to be involved in their clients’ best interests. Banks are often interested in the bottom line whether or not they are making money. According to the Consumer Financial Protection Bureau, “In 2009, some 1,045 agreements were in effect. Since the Credit Card Accountability,
Responsibility, and Disclosure Act went into effect, however, the number of agreements has decreased by nearly 70 percent, to the point that only 336 agreements were in effect by the end of 2013.” The Credit CARD Act requires issuers to inform the CFPB of the terms and conditions of any college
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Debt page 2
Money exchange woes dash education hopes By Lauren Marvin
When it comes to money, it’s a waiting game for Venezuelan students trying to get money out of their banks back home. Venezuela is struggling to fight its way out of an economic recession, and to aid the effort has placed strict controls on sending money out of the country – even when it belongs to someone living abroad. In order for students to receive their money from their Venezuelan bank accounts to pay for school, a difficult and time-consuming exchange process must be completed. And for some students, it’s making education almost impossible. Annibal Reyes, a communication and journalism major, said he couldn’t register for the spring semester because his money is held in a Venezuelan bank. In order to pay off his $17,000 debt for the fall semester, Reyes said, he has to exchange his Venezuelan bolívar to U.S dollars. However, a process that is estimated to take 10 days has now turned into four months. Last October Reyes submitted a 90 page folder, which included a list of expenses and letters from UNM. He said he has not received word yet on the status of the exchange. For now, UNM has halted his enrollment for this semester. He must pay at least half of his debt by Feb. 20 or he has to go home, he said. “I don’t want to leave UNM. I really love this place. This is like my
second home,” Reyes said. “I came here by myself — all my family is over there. I started a new life here, making new friends, being involved, and I feel like a part of UNM.” Linda Melville, associate director at the Global Education Office, called the process for the exchange that currently affects around 22 Venezuelan students “confusing and convoluted.” GEO has helped by writing letters in Spanish and English multiple times and reaching out to the Venezuelan government, but, she said, nothing more can be done. The process begins with students submitting a report, which then goes to the Venezuelan consulate. A board then reviews the request for exchange, and if approved the money is exchanged, she said. “There’s not much we can do. This is a political problem, so we tried to outreach to the consulate. We tried to work with students who want letters rewritten a certain way, but we can’t effect change with the Venezuelan government,” Melville said. “That’s really at a higher political level than us. We can’t do anything. That’s the thing that is really frustrating about it.” Meville said Venezuela is the only country that requires the student and the state institution to write letters regarding expenditures in order for the students to exchange their own money. “It’s not just us, this is every Venezuelan person who is in the U.S. and certainly every student has to go through the same process. A lot of in-
Diana Cervantes / Daily Lobo / @dee_sea_
Annibal Reyes is one of the 22 Venezuelan exchange students affected by the devastating economic climate in Venezuela. Reyes cannot access his money in Venezuela and is unable to register for spring semester classes.
stitutions are in the same boat as we are,” Meville said. Reyes has approached the Global Education Office, the Dean of Students, the Bursar’s Office, a community director at the dorms, and professors at the music department looking for help, but they have been unable to assist him except through emotional support, he said.
“I’m not asking for them to just ignore the debt. No, I’m just asking for time. Because if they give me time for this semester, that will give me some time with my government to send me some money or move resources,” Reyes said. Daniela Collazos, a special education freshman, said she is also having difficulties exchanging her money.
She started the paperwork in May 2014 and in five months she spent $500 on the processing fees alone. Collazos was able to pay for the fall semester because she had been saving money since arriving in the United States in 2013. However, now Collazos is looking
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Venezuela page 2