|
|
|
Paper
or Plastic?
By
Michael Penn MA'97
For college students, credit cards can be a safety
net — or a tempting path to serious debt. Campus
leaders are looking for ways to help students make
informed choices when card companies come calling.
 Josh
Lelah x'02 knows that he can't afford the five-thousand-dollar
projection-screen television that he really covets
for his apartment. But he's also aware — dangerously
aware — that he could own it in a second, if he so
desired. All he'd need to do is call upon some of
the $8,500 in credit afforded to him by his Visa card.
Lelah,
a junior majoring in personal finance, is smart enough
not to do it. "I know I don't have the income
right now," he says. But the temptation is real,
and, for university leaders, so is the worry.
During
the past few years, universities across the country
have witnessed a plastic invasion on their campuses,
as credit cards have grown as popular among students
as backpacks and bicycles. And while many students
seem to like and appreciate the convenience that credit
cards give them, for some, the bills are adding up.
Earlier this year, Nellie Mae, one of the largest
providers of student loans in the country, analyzed
the credit records of college students who applied
for its loans during 2000, finding that nearly four
of five held at least one credit card. The average
balance among student accounts was $2,748 — a 46
percent rise from a 1998 study. Nearly one student
in ten showed a debt of more than $7,000.
Even
for those like Lelah, who pay off their debts reliably,
the oh-so-generous credit limits with which they're
rewarded put them just one swipe away from financial
jeopardy. It's enough to convince many university
officials that something needs to change in the relationship
that credit card companies have with students.
"I
think it's a dangerous trend, because it's so unrealistic,"
says Casey Nagy MA'89, special assistant to the chancellor.
"Students are very busy, and they're just getting
acclimated to being on their own. All of a sudden,
here comes this thing that allows them to get what
they want and need and get it when they want it. "Sooner
or later, there is going to be a reckoning,"
he says.
1, 2, 3,
4,
next
On Wisconsin home page
|
|
