College Students In More Debt Than Ever - A Trend to Watch

This post is not a reader question, but an addendum to my previous post about college students and credit card use.

I just read a report by Sallie Mae (the largest provider of student loans in the U.S.) that said credit card debt levels among undergrad students has reached record levels. The report was actually dated from last month, April 2009, but it just came to my attention yesterday.

• In 2008, approximately 84% of undergrad college students had credit cards, up from 76% three years before.
• The average balance on credit cards among undergraduates has reached an all-time high. In 2004, the median debt amount was $946. Last year, the median debt rose to $1,645. This is a worrisome trend.
  
• The average debt among college graduates has also risen, from $2,900 to $4,100. Again, it's the trend here that is worrisome -- not the numbers themselves.
  
• Only a small minority of college students (17%) said that they regularly pay off their credit card balances each month. That means the majority are piling up debt during their undergrad, missing their payments due, or a combination of these two things.
  

From a home buying perspective, these trends suggest that college grads will be less and less qualified for mortgage loans as time goes on. Of course, this upward trend could merely be a sign of our tough economic times, and the trend line my go back down as our economy recovers. But it's still a notable change that needs to be addressed.

This kind of growing behavior is exactly what I described in my hypothetical scenario about John and Jane. It seems that an increasing number of college students are falling into the "John" camp -- carrying more debt, harming their credit scores, etc. This troubles me, and it's primary reason I'm writing this post.

Are Colleges Failing Their Students - Financially?

Here's something else that really bothers me. According to the same Sallie Mae survey cited above, most students feel that they are not learning enough about financial management: "Eighty-four percent of undergraduates indicated they needed more education on financial management ... [and] 64 percent would have liked to receive information in high school and 40 percent as college freshmen."

My question is, why are these kids not being educated about responsible credit use, as a mandatory part of the matriculation process? Why are the credit card companies given paid access to campus venues? Why aren't more people worried about these trends, as I am?

Sure, it's a personal responsibility issue. People are responsible for their own financial actions. But it's also an education issue. And education is supposed to be what college is all about. Right?

References:
Study finds rising number of college students using credit cards for tuition. Sallie Mae news release. April 19, 2009.