Student Loans and Credit Card Debt Dampen the Joy of Graduation Day

June 2008

Graduation is drawing near, and across the country parents and their kids are gearing up for a new stage in their life....paying back student loans and credit card debt.

As it's addressed at Boston.com, the details are alarming; undergraduate borrowers leave school with an average of $20,000 in student loans, and graduate borrowers owe more like $45,000. In some cases, hard-working and intelligent kids don't even go to college because they're afraid of taking out loans they'll be stuck with for years to come.

And then there's the specter of credit card debt, and predatory credit card companies who spend millions of dollars focusing on students through promising rewards and low-interest teaser rates designed to get them to sign up. Today credit card debt is fast becoming another means by which college age kids accrue large amounts of debt before they even enter the workforce and generate an income.

The article suggests that we rely on programs like "Service Pays" to help students get over debt accrued through student loans. "Service Pays" is a program that allows kids to get loan forgiveness if they work in public service for a certain number of years. It provides the benefit of two services at once; public service needs get met, and young people need not fear the burden of student loans on their graduation day.

But what about credit card debt?

The best way for students to deal with credit card debt is to avoid using cards in the first place, or to understand what it means to use them wisely. This means that parents need to have stern and informative conversations with their kids to help them make smart financial decisions.

After all, there's enough pressure out there for young people to find a good job and do well in life without having the shadow of student loans and credit card debt hanging over their heads.