Students rack up debt paying for tuition on credit cards

MARIA D’ALESSANDRO MANAGING EDITOR MAD724@CABRINI EDU

Forget charging pizza to a credit card. Forget about even charging textbooks from Cabrini’s bookstore. How about paying for college on a credit card? Have students forgotten about student loans?

Asurvey conducted at Smith College found that students have forgotten about student loans.

The survey found that 23 percent of students are using credit cards to pay for tuition and fees, and 52 percent are using them for textbooks and school supplies.

According to insidehighered.com, most students end up using credit cards as ameans of debt, so the interest rates on cards exceed those of student loans. Common sense tells students to take out loans, but sometimes the filing process for loans or the struggles in a business office can lead students to resort to credit cards.

Carol Morgan, the accounts receivable manager at Cabrini College, said that undergraduate students use more loans than graduate students, who use credit cards more often.

“It is very common that the majority of payment is through credit cards,” Patty Schwartz, the accounts receivable coordinator, said. “It always happens at the last minute.” major, said, “I think all of the students are going to benefit greatly from the SETbuilding.” Nacarelli and other students agreed that the new lecture hall inthe SETbuilding is quite different from what they have had in previous years. The new lecture hall, a special feature of the building on the first floor, has wired connections for 72 laptops and is equipped as a video conference center with cameras, microphones, speakers, two projectors for simultaneous video presentations, Smart Technology’s Sympodium and full electronic control from the podium. Freshman, Scott Reimer said, “I am really looking forward to working in here.”

Schwartz said that the “last minute” transactions occur mostly at the end of the fall semester, when students realize that their balance will keep them from registering for the spring semester.

Mike Colahan, the director of financial aid at Cabrini College, agrees that there is a “surge of loans” to pay balances at the end of the fall semester because of “poor family planning,” Colahan said.

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The survey found that “more students in the survey had credit card debt than had student loans65 percent compared to 48 percent. And 65 percent of the students with credit cards had two or more cards.”

The 700 students, undergraduate, graduate and professional, responded with statements averaging a debt of $2,400 on their credit cards. Also, half of the students reported charging their cards to the limit some or most of the time.

Colahan said, “The amount of loan applications has gone up, but it is not as much as expected.” He attributes this mostly to families saving more money, and saving early.

However,saving money does not mean that credit cards are extinct. Credit cards are still used for the typical items as well. In addition to tuition, textbooks and school supplies, students used their credit cards to pay for the following: personal items (58 percent), dining out (50 percent), entertainment (48 percent), groceries (47 percent) and travel (33 percent).

It was also noted that the survey might be skewed, based on sex, as 72 percent of those who responded were women. In comparing the women and men in the survey, the Smith researchers found that women were more likely than men to have credit card debt over $5,000, pay late, and not pay their balances in full.

Loquitur welcomes your comments on this story. Please send your comments to: Loquitur@yahoogroups.com .

The editors will review your points each week and make corrections if warranted.