2008 Woodie Awards
The slippery slope of student debt
by Liz Seasholtz
Issue date: 4/10/07 Section: News
Every time junior Alyssa Spiegel swipes her shiny blue Visa card to purchase something, she cringes.
"I know eventually I'm going to have to pay off my credit card balance with money I don't have," Spiegel said. "There's just no joy in shopping anymore."
Spiegel is one of many college students dealing with the pressures of paying for basics such as food, clothing and rent, on top of paying off student loans for tuition. To deal with these payments, she admits to an increasing dependence on her credit cards, despite the mounting total she owes.
"I feel like I'll never be out of debt," she said. "The bills are just always piling up."
Robert Shireman, executive director of Project on Student Debt, said one reason many students are in debt is because of their need to pay off expensive college loans. While tuition has increased, financial aid has decreased.
"Overall, the cost of college has gone up, particularly at public universities," Shireman said. "In addition, the government is putting less money in the system for grant aid."
According to the National Center for Education Statistics, in 2004, 66.4 percent of graduates had student loan debt, as compared to less than 50 percent in 1993.
Student debt is made even more complicated by the convenience of credit cards and students' reliance on them, Shireman said.
"Credit card companies are aware they have a captive audience of newly-minted adults who are just getting into the credit scene," he said. "Like tobacco companies, they believe if you get students to go with your brand, you can hold onto them for a long time."
Whether in the form of credit card expenses or loans, Shireman said students are left paying for their college expenses years after they graduate.
Inability to pay can lead to a poor credit report, which according to Equifax.com, one of the leading credit reporting agencies, can be viewed by anyone from landlords to insurance companies to potential employers.
"I know eventually I'm going to have to pay off my credit card balance with money I don't have," Spiegel said. "There's just no joy in shopping anymore."
Spiegel is one of many college students dealing with the pressures of paying for basics such as food, clothing and rent, on top of paying off student loans for tuition. To deal with these payments, she admits to an increasing dependence on her credit cards, despite the mounting total she owes.
"I feel like I'll never be out of debt," she said. "The bills are just always piling up."
Robert Shireman, executive director of Project on Student Debt, said one reason many students are in debt is because of their need to pay off expensive college loans. While tuition has increased, financial aid has decreased.
"Overall, the cost of college has gone up, particularly at public universities," Shireman said. "In addition, the government is putting less money in the system for grant aid."
According to the National Center for Education Statistics, in 2004, 66.4 percent of graduates had student loan debt, as compared to less than 50 percent in 1993.
Student debt is made even more complicated by the convenience of credit cards and students' reliance on them, Shireman said.
"Credit card companies are aware they have a captive audience of newly-minted adults who are just getting into the credit scene," he said. "Like tobacco companies, they believe if you get students to go with your brand, you can hold onto them for a long time."
Whether in the form of credit card expenses or loans, Shireman said students are left paying for their college expenses years after they graduate.
Inability to pay can lead to a poor credit report, which according to Equifax.com, one of the leading credit reporting agencies, can be viewed by anyone from landlords to insurance companies to potential employers.
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