While an increasing number of college students received financial aid in the 2007-2008 academic year, that calendar year students also ran up more credit card debt. The average college student owed $3,173 on credit cards in March 2008, compared to $2,169 in 2004. This information comes from the student lender Sallie Mae, which has been tracking students' credit card debt since 1998.
The study also found that student credit card debt increases with grade level. The average freshman owed $2,038 on credit cards, while the average senior owed $4,138. The money is not just being spent on beer and pizza, either. According to a supplemental survey by Sallie Mae, the vast majority of students (92 percent) report charging at least one educational expense, such as books, to a credit card. This figure is also higher than in 2004, as is the percentage of students charging tuition to a credit card, which now stands at nearly 30 percent. Students reported charging an average of $2,000 in educational expenses to credit cards.
Higher tuition, a poor economy, and difficulty finding private loans may have already pushed these numbers higher for 2009. With high interest rates and the need to begin repayment immediately, credit cards are one of the worst ways to pay for school. Scholarship opportunities and federal student financial aid should definitely be explored before students resort to charging tuition to a card. A variety of grants and scholarships, as well as low interest student loans, can help students avoid credit card debt while in college, and keep their debt from consuming their entire salary when they graduate. Before you reach for the plastic to pay your campus bills, spend a few minutes doing a free scholarship search. You may be very glad you did.