Magazine article American Banker

Study: Card Debt Takes Heavy Toll on Students; Research for Consumer Group Finds Them Suffering Emotionally, Academically

Magazine article American Banker

Study: Card Debt Takes Heavy Toll on Students; Research for Consumer Group Finds Them Suffering Emotionally, Academically

Article excerpt

A consumer group has found fresh ammunition for its effort to coax Congress to restrict college students' access to credit cards.

On Tuesday the Consumer Federation of America released a study it had commissioned that aims to show the emotional costs of accruing debt.

The research found instances in which college students with large debts had dropped out of school to pay off their credit cards, gotten turned down for jobs because of poor credit records, and suffered from severe anxiety.

The survey, conducted by Robert D. Manning, a Georgetown University sociology professor, was based on 300 interviews and 400 written responses to a questionnaire. The research took place over three years and involved students at Georgetown, American University, and the University of Maryland.

The Consumer Federation of America of Washington, a consumer advocacy group, has been lobbying for several bills in Congress that would curtail card-issuing to college students and will use Mr. Manning's study to support its position.

"Congress should pass legislation permitting only those minors with parental approval or sufficient income to obtain credit cards," said Stephen Brobeck, executive director of the Consumer Federation of America.

Speaking at a news conference Tuesday, Mr. Brobeck said the purpose of Mr. Manning's study was to "understand the causes and consequences of credit card debt."

Mr. Manning said students from lower-income families suffered more stress about credit card debt than students from affluent families, whose parents in many cases would pay off their debts.

"It's easier for unemployed students to get credit than low- to midincome families," Mr. Manning told reporters.

From 10% to 15% of students from the public college surveyed-the University of Maryland-and 30% to 35% of students from the two private universities said they got help from their parents when card bills mounted.

Students who drop out of college often cite poor grades as the primary factor, but that explanation masks the number of students whose real problems stem from indebtedness, Mr. …

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