More Graduates Leaving College with Debt

	Auburn, May 12, 2002--Many college graduates are leaving college with more than just a 
diploma these days.  They are leaving with student loan and credit card debt.  In fact, most students are 
meeting their college financial needs through student loans rather than grants. 
	 In addition to student loan debt, many college graduates also face the burdens of credit card 
debt.  One study shows that the average undergraduate has an average balance of $2,700 in credit card 
debt. 
	College students are the prime target group for credit card companies. Realizing that most 
parents will help pay their college students' bills, card companies heavily market cards to this age group.  
Studies also show that the first credit card someone owns is usually used the longest and the most. 
	Having a credit card appeals to most students, but that appeal quickly fades when card balances 
swell and card interest costs as much as the actual balance, and that balance just doesn't seem to go 
down. 
	To avoid the credit trap, parents and students need to work together to develop a budget, says 
Robert White, a financial specialist for family programs with the Alabama Cooperative Extension System.  
If a student gets a card, a multipurpose credit card with no annual fee might be the best choice, if the 
balance is paid in full each month.  
	Students who find themselves in financial trouble can take simple steps to correct the problem, 
adds White. 
 "First, stop charging on the card.  Take it out of your wallet so it is not available.  Second, pay 
more than the minimum payment each month.  Minimum payments are a way credit card companies trap 
individuals into paying long-term interest."
	Students who practice smart credit card usage will face less stress and have more freedom upon 
graduation than those graduates locked into monthly card payments, student loan payments and living 
expenses. Expenses add up quickly. Many students find that even though  they have a good paying job 
after graduation, once student loan, credit card payments and major expenses are paid, there's not much 
money left over.  That's when good budgeting comes in handy. 
	
SOURCE:  Robert White, Financial Specialist, Family Programs, Alabama Cooperative Extension 
System, (334) 844-2235