College Loan Consolidation, Federal Loan Consolidation, Private Loan Consolidation, Student Loan Consolidation

America's Top Student Loan Provider

Alternative College Funding: Credit Cards
by Emily Zaborniak
Credit card companies know just how to market to eager young college students. Walk across almost any college campus, and you will see representatives waving free t-shirts, throwing free Frisbees, and dangling free key chains. The only thing a college student has to do in order to receive any of these "free" items is fill out a credit card application. Another effective tactic is marketing through the mail by sending students pre-approved cards with activation only a phone call away. It's easy to dial the 800 number and open a credit line while hanging out in one's dorm. However they have ended up with them, a significant number of college students have credit cards in hand; unfortunately, many do not understand the rules and dangers associated with overcharging.

The latest trend in credit card use by college students isn't online shopping—it's charging tuition payments. According to a recent online news update by Higher Education Washington, Inc., more than half of students have credit cards in their names, and a quarter of them are using those cards to finance escalating tuition payments. Because college students are just beginning to establish credit, the interest rates on these cards tend to be brutally high—often higher than they would be if a student were to take out federal student loans and consolidate them at fixed rates.

Considering the costs of tuition and the costs of compounding interest, a college student can quickly rack up a substantial credit card balance. And students rarely have the income they need to keep up with payments, which they will need to make while they are still in school. In an October 2006 press release, the American Council on Education (ACE) reported that "overall, more than four in ten student cardholders carried a balance from month to month, with a median balance of $1,000." 55% of students counted in that statistic accumulated balances by charging their tuition.

If college tuition continues to increase, then it's reasonable to conclude that more students will rely on credit cards to patch together "affordable" educations. Some students feel the burden over the course of their college years. The ACE study reported that 48% of student cardholders carried balances by their fourth or fifth years in college. Some students begin charging right from the start, as ACE's study confirmed when it found that this was true for 37% of freshmen.

"If students are floating their credit card payments, that's troubling because there are certainly less expensive forms of credit," said Jacqueline King, Director of the ACE Center for Policy Analysis.

The press release announcing the ACE study discussed the roles institutions play: "Many schools, particularly state institutions and community colleges, let students or parents pay tuition bills with credit cards for convenience. But some institutions refuse to allow the practice, saying they worry it will steer students toward more expensive ways to borrow. Some colleges also say the fees charged by credit card companies to process the payments aren't worth it."

Despite the warnings and statistics, students are turning to credit cards out of desperation, due to their accessibility. With cards at their fingertips, it's easy to get caught in the cobweb of credit.


Article Title : Alternative College Funding: Credit Cards
Comment not found for this article.

Share this story:
  • BlinkList
  • blogmarks
  • Digg
  • Facebook
  • Google
  • Sphinn
  • MySpace
  • NewsVine
  • Simpy
  • StumbleUpon
  • Technorati
  • E-mail this story to a friend!
  • Print this article!
  • Faves
  • Furl
  • Netvouz
  • Slashdot
  • Spurl
  • Yahoo! Buzz

EdFed introduces… Awareness… Learnal
At, EdFed, we proudly introduce 'articles on student loans' and 'Learnal - the journal to learn from', our free newsletter on student loan management, which is sure to keep you informed of the latest events and happenings in the student loan market. To receive your copy of the above just use the RSS feed below and add this to your "My Yahoo", blogs, newstickers, and other similar channels accepting distributable content.
Click here to sign up for our Weekly Newswire now!

How EdFed Helped others!
The first time I called in I spoke with a loan consultant immediately. The representative that I spoke with was knowledgeable and able to answer all of my questions. He took me through each step of the application and explained all of the details. He was extremely friendly and I thank him deeply for helping me through the consolidation process.
- Greg M.  , NC
* Your Name: * Your E-mail Address:

We respect your privacy.
* Your Friend's name: * Your Friend's E-mail address:
Include a Message:
+ Privacy Policy

Student Loan Consolidation Info - How to Choose the Right Loan Company

This column is sponsored by Granted, America's top job search engine. The Career Resources column is presented by Granted, America's leading job search engine dedicated to getting people jobs.

Education is one of the most basic right of any human, but with the increase in prices and the costs involved in education this has made these rights turn into a privilege which very few can enjoy. Any normal person today in the whole of United States has to take an education loan at one point of time to pay for their education fees.

read more
Schools Will No Longer Receive Paper FAFSA Forms
(September 20, 2007)

news desk
Stafford Loan Payment Calculator
PLUS Loan Payment Calculator
Loan Consolidation Payment Calculator
Glossary of Terms
Loan Comparison Chart
Scholarship Search
The consolidation application process is simple and may be done over the phone or online in minutes.
US School Directory
Comprehensive List of Schools at which EdFed Assists Students.
EdFed is a FFELP lender with lender identification number 834241.
© Copyright 2017 EdFed. All Rights Reserved.

Home · About Us · Contact Us · News · Sitemap
Career Advice · Tell a Friend · Privacy Policy · Resume Service
Resume Distribution Service · Post Resume · Job Search Course
Sign up for the latest news on student loans.
Email Address:
+ Most Recent Newsletter
+ Newsletter Archives