Debt and College Kids

The cycle of debt starts early for many Americans these days. With credit card companies setting up at campus sign-up tables, many new graduates start their working lives saddled with debt, most of which is unrelated to school expenses.

In 1998 a Student Loan Survey, showed that about half of students that drop out do so because of borrowing worries. Graduates wind up spending $150 a month to repay educational loans and nearly five times that much to pay for other borrowing. The number of bankruptcies among people under 25 has grown 50% since 1991 says Elizabeth Warren, professor and bankruptcy expert from Harvard Law School.

Step back and decide for yourself where debt would be more useful instead of letting the lending industry decide for you. It takes discipline to develop a plan that lets you tap into borrowing power and also keep your total debt load under control.

Source: Keep borrowing in its place. (1999, July). Consumer Reports, 13.