Printer Friendly

Charge it: college student credit card use on the rise, says Nellie Mae study. (Financial Aid Watch).

In its third in a series of credit card usage studies conducted since 1998, Nellie Mae randomly selected data for 600 undergrads, aged 18 to 24, attending four-year public and private institutions. The students had applied for a credit-based loan with Nellie Mae during the summer and fall of 2001. (The same methodology was used in 1998 and 2000, with a smaller sample size; methodologies year-to-year remained consistent.) Highlights of the study:

* Graduating students have an average of $20,402 in combined education loan and credit card balances, but ...

* Undergraduate college students are carrying credit cards in record numbers. The percentage of students holding at least one card in 2001 has risen 24% since 1998.

* 83% of undergraduate students have at least one credit card; a 24% hike since '98.

* Although freshmen have the lowest rate of card possession among undergraduates, 54% carry a credit card. The percentage of students with at least one card increases to 92% in sophomore year.

* Only 23% of freshman, on the other hand, have a student loan. For many students entering college today, their first credit experience is with a credit card, whereas 10 years ago it was through a student loan.

* The median debt level among card-carrying undergraduates--where half the population have balances lower than this amount and half have balances higher--has risen to $1,770, up 43% from $1,236 in 2000. This is an indicator that more students are using their cards regularly and may not be paying off the balances each month.

* 21% of undergraduates who have cards have high-level balances between $3,000 and $7,000; a 61% increase over 2000.

* The good news is that average credit card balances among students who have cards is $2,327, and has decreased by 15% from the previous average calculated in 2000. The percentage of students with balances greater than $7,000 has also declined.

* The bad news: Students double their average credit card debt, and triple the number of credit cards in their wallets, from the time they arrive on campus, 'til graduation.

Source: "Undergraduate Students and Credit Cards: An Analysis of Usage Rates and Trends," 2001, Nellie Mae (a wholly owned subsidiary of Sallie Mae).
COPYRIGHT 2002 Professional Media Group LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2002, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

Article Details
Printer friendly Cite/link Email Feedback
Publication:University Business
Date:Sep 1, 2002
Words:366
Previous Article:Update: UMASS recognizes RA union: undergrads will join labor force. (Update).
Next Article:You can snooze, and ya won't lose: UO offers tuition break for late-day classes. (Update).


Related Articles
Student loan default avoidable.
Students carry heavy debt loads.
2002 guide to financial aid lenders. (Special section: the economy).
The challenged financial aid officer, part 1: financial aid officers anticipate their most daunting challenges for 2003. (On The Money).
Money management 101 needed: credit card use is up among students; financial literacy down. (Financial Aid Watch).
The challenged financial aid officer, part II: financial aid officers reveal the impact of the economic downturn in 2001-2002. (On The Money).
Drowning in a sea of debt: more students are taking out college loans, and for greater amounts than ever. Some are asking whether it's worth it.
2003 guide to financial aid lenders. (Special section: financial aid).
Bankrupt by 25: people under age 25 make up the fastest-growing age group filing for bankruptcy. Easy credit, bigger student loans, and financial,...

Terms of use | Privacy policy | Copyright © 2018 Farlex, Inc. | Feedback | For webmasters