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CREDIT CARDS ON CAMPUS:
Social Costs and Consequences of Student Debt

This report was originally released at the National Press Club in Washington, D.C. on June 8, 1999; the press conference was sponsored by the Consumer Federation of America. Based on over three years of primary research, the study features a unique set of comparative data that includes more than 350 in-depth interviews (over 300 undergraduate and over 50 graduate students) and more than 400 surveys among students enrolled in Metropolitan Washington, D.C. universities.

The report examines the intensifying financial pressures on American college students, decline in federal student grants, and the escalating cost of higher education. It begins by comparing student debt levels at private and public colleges and universities. Surprisingly, debt is increasing faster at public schools. The use of student loans to pay off credit cards is a partial explanation. This finding illustrates the dynamic nature of student survival strategies and complex patterns of debt (credit cards, consumer loans, and student loans). Overall, more than 70% of all college students have credit cards and their debt is escalating rapidly.

The report reveals the social and economic consequences of debt as well as intensifying consumption pressures on college campuses. The influence of credit card marketing campaigns is also discussed. The findings include emotional anxiety, anger over loss of freedom (need to work extra jobs), conflicts over parents’ social control, academic difficulties, loss of scholarships/financial aid, bankruptcy, job rejection, and even suicide. Lastly, the cost of credit to students is examined as well as growing pressures to use credit cards to provide financial support to family members.


Order the Publication

Table of Contents
Section  
Page
I INTRODUCTION: ‘Plastic Money for Real People’
4
II THE DYNAMIC PATTERNS OF STUDENT INDEBTEDNESS: The Complexity of Measuring Credit Card Debt
6
III AFTER “The Magic of Plastic’ WEARS OFF:
The Social Consequences of Credit Card Dependency
26
IV MOM, Did You Borrow My [Master]Car(d)?
Confronting the Middle Class Squeeze
38
     
Appendices
A Student College Loan Debt: Costs and Indebtedness of 1997 Graduates (Selected Private Schools)
47
B Student College Loan Debt: Costs and Indebtedness of 1997 Graduates (Selected Public Schools)
48
C Basic Themes of Mass Marketing Campaigns
49
D Cost of a One Month Cash Advance on Student Credit Cards: ($20, $50, $100 loan)
51
E Credit Card Payoff Schedule: Interest Rate and Minimum Monthly Payment )
53
F Cost of a $50 Textbook Financed With Credit Cards:
Interest Rate and Number of Years
54
 
 
 
Bibliography
55
     

 

 


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