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A recent study by student lender Sallie Mae shows that college students are now relying more heavily on their credit cards than they have at any time in the past. College students carry an average balance of nearly $3,200 and graduating seniors leave their institutions with more than $4,100 in credit card debt.
The number of freshman college students that carry a zero balance has dropped to just 15%, down from nearly 70% in 2004. The average freshman college student’s debt is $939.
The study also showed that 6 in 10 college students indicated that they were surprised by the size of their balance. Four in ten student respondents admitted charging items that they could not otherwise pay for.
Graduate students haven’t fared much better. According to 2006 research conducted by Sallie Mae, the average graduate student’s credit card balance was more than $8,100, and older graduate students Ã¢â‚¬â€œ those between the ages of 30 and 59 Ã¢â‚¬â€œ carried an average credit card balance of nearly $12,600.
Ninety-two percent of students said that they had used their credit cards to pay for education expenses like textbooks. This represented a seven percent increase from the 2004 study group. According to the latest research, three in ten students had used their credit cards to pay tuition expenses, up from 28% in 2006, and up from 24% in 2004.
What’s most concerning about the use of credit cards to pay tuition bills is not the percentage of students who do that, but rather the amount they’re putting on their credit cards. In 2004, survey respondents said that they had charged direct education expenses of $942 on average. The 2008 study group reported that they had charged on average $2,200 in direct education expenses, an increase of 233%.
Only 17 percent of respondents said that they paid their credit card bills in full each month, a 3 percent drop from the earlier survey. According to the survey, college students have 4.6 credit cards on average, and half of all 1,200 respondents had more than four credit cards.
One-third of students in the survey reported that they never discussed credit cards with their parents. These students were most likely to use their credit cards to pay tuition and were most likely to be surprised by their credit card balances.
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