News Highlights

Credit card use among college students is up

2006-04-09
By Robb Murray Free Press Staff Writer [published in The Free Press, Mankato, MN 3/28/2005]

MANKATO — His parents don't help him and his two jobs haven't been enough to cover all the costs.

So Anthony Untiedt resorted to what a lot of college students resort to these days when it comes to paying for college: plastic.

"There is no other option for me," he said Friday in Minnesota State Univer-sity's Centen-nial Student Union. Unti-edt estimated that by the time he graduates, his debt from paying tuit-ion, covering rent and buying books would be more than $65,000.

"I figure," he said, "with a decent job, it'll take me about 10 years to pay it off and still live comfortably."

A study released this week by the Minnesota State Colleges and Universities system showed that about 25 percent of all students in the MnSCU system have used a credit card to help fund their education.

Among the survey's other findings:

• About 75 percent of students say their parents are not helping them pay for college. Of the 25 percent who said they are receiving help, only a quarter said their parents are paying for their college in full. Ninety-five percent of students who had to borrow money to pay for college said their parents will not be helping them repay their student loans.
• Eighty-one percent of college students surveyed held jobs while going to school.
• Nearly a fifth of all students took out private loans to help pay for college.

(View the entire report at www.mnscu.edu)

Sandra Loerts, MSU's financial aid director, said it's been no secret that students have been using credit cards to pay tuition or purchase their books.

Some students, she said, simply prefer to pay online, and the only way to pay online by using a credit or debit card. They'll then pay the credit card bill right away. Or, rather, some of them will. Others simply feel they have no choice, she said, and feel they must use a credit card or not attend.

"Credit cards aren't a good option, but they are easily available," she said. "What I would recommend is alternative loans, and those interest rates aren't nearly as high as credit cards."

Loerts said MSU can offer any student an alternative loan with an interest rate of about 8 percent or 9 percent. And they've become very popular in recent years as tuition has skyrocketed.

During the last four years alone tuition at MSU has gone up more than 60 percent. It's no surprise, then, that the amount of money doled out in alternative loans at MSU has doubled in the last year. This year's amount totals about $3.5 million.

Students can learn more by asking at the financial aid office, and Loerts said just about every major lender is offering such loans, which have been in existence for about 10 years.

Email this article | Permanent link | Topstories news | Topstories news archives