College Class of ’09 to Graduate with a Major in Credit Card Debt

October 1st, 2008

The credit crunch continues to take its toll, and our tracking of the student credit card market indicates that many of this year’s seniors are facing a “perfect storm” of severe financial struggle after graduation. The convergence of higher student loan debt, student attitudes toward credit card debt, and a dim employment outlook are just some of the factors that will cause difficult circumstances for some graduating college students this year.

Government loans and grants have failed to keep pace with educational costs, and ten percent of student borrowers already rely on private loans to bridge the gap. The recent credit crisis has impacted the ability of students to obtain these private loans, however. Over the summer, more than two dozen lenders, including Bank of America, Citigroup and Wachovia, stopped or curtailed their private lending to students.

Separate studies by the American Council on Education and by U.S. PIRG both found that roughly 25 percent of student credit card holders used their cards to pay for some portion of their tuition. With major lenders now limiting the availability of private student loans, we may see that percentage of college students paying a portion of tuition on credit cards increase.

On top of this trend, student attitudes toward credit may also be a factor in increased credit card debt. More than 25 percent of college students think it is reasonable to use their credit cards as a means to raise cash, according to a recent National Association of Retail Collection Attorneys (NARCA) survey. The NARCA survey also revealed that 31 percent of those polled did not worry about college student credit card debt because they believed they could pay back outstanding balances once they were out of school and earning a regular paycheck.

This optimism may be ill-founded. Unemployment numbers for individuals between the ages of 16 and 19 – years that encompass a good portion of the college student population – rose steadily in May, June, and July – from 18.7 percent, to 18.1 percent, to 20.3 percent respectively. This means that many students were unable to earn income during the summer break, and the outlook for employment after graduation may be similarly bleak.

Students are using credit cards as a last resort to pick up the slack when they have difficulty getting loans or jobs to cover their expenses. With fewer loans and jobs available, more students may find themselves rich in knowledge, but deep in debt come graduation day.

For a copy of Kaulkin Ginsberg’s report The Student Market for Credit Cards: Issues and Trends, or for more information on college student credit card debt, visit the Free Reports section of


For more information, contact us at


Comments are closed.


Suggestions for my High School Graduate

June 20, 2017

High school graduation is a time of excitement for many as they head off to college. Today, I thought I'd share some of the advice I gave my youngest son in case anyone else has a child preparing to go off to school sometime soon. ....

» see this post    » all posts

ARM Industry Merger and Acquisition Trends

June 14, 2017

Do M&A trends within the ARM industry defy traditional business and economic theories? Today's KG Prime sponsored blog examines industry performance from 2007-present, and the effect changes in operating conditions had on consolidation trends. ....

» see this post    » all posts

The Department of Education Contract: A Candid Discussion between Industry Experts Mike Ginsberg and Randy Kamm

June 13, 2017

The Department of Education unrestricted debt collection contract procurement process seemingly has no end in sight. Industry experts Mike Ginsberg and Randy Kamm examine the current situation, and the decisions that brought us to where we are today. ....

» see this post    » all posts


Kaulkin Ginsberg Moves Its Market Intelligence Online

June 8, 2017

Kaulkin Ginsberg is changing the way busy owners, executives, and senior leaders access strategic market intelligence with the launch of KG Prime. KG Prime is a comprehensive and easy to use web-based service that provides users with economic, market segment, and other forms of strategic research.....

» see more

AXIAL FORUM - Publishes "Succession Planning - A Critical Missing Element in Many Family-Owned Businesses"

June 7, 2017

AXIAL FORUM, a web-based strategic mediator for the M&A industry, recently published an article succession planning by Topline Valuation Group. This article was co-authored by members of the Topline Valuation Group and Kaulkin Ginsberg team....

» see more

ACA of Texas Publishes "Three Critical Healthcare Industry Trends for Outsourced Business Services" in its Winter 2017 Magazine

March 16, 2017

The ACA of Texas Publishes "Three Critical Healthcare Industry Trends for Outsourced Business Services" by Kaulkin Ginsberg in its Winter 2017 Magazine. Kaulkin Ginsberg details its belief that the growth in patient lending and financing programs, clinical integration networks, and physician quality reporting systems for the Centers for Medicare and Medicaid Services (CMS) could have profound effects on companies focused on servicing healthcare providers in 2017 and beyond.....

» see more