Recently, I was doing some research on college students and their parents for one of my classes. Typing as far as “college students and” in the Google search bar yielded such morbidly predictable suggestions as “college students and stress,” “college students and depression,” and “college students and alcoholism.” I was startled to find, however, that terms related to credit cards, debt, and spending were the most prominent among the suggested searches.

While the days of campus credit card marketers seducing us with promises of fat lines of credit and free sandwiches are behind us, thanks to new legislation, the combination of access to money, the first tastes of adulthood, and the bubble of college life remains a danger that can continue to infantilize students long after they’ve tossed their graduation caps in the air. Earlier this year, Sallie Mae, a student loan provider, released a study that found that the average undergraduate held $3,173 in credit card debt in 2008—the highest debt carried since the company started running the study in 1998. When the study was last conducted in 2004, students carried over one-third less credit card debt, with an average of $2, 169.

To be sure, not all of the debt that haunts students is the product of some ill-advised eBay adventures. The same study suggests that more students than ever are covering educational expenses with credit cards, including books and supplies. The economic crisis may have something to do with it: budget cuts suffered many universities, compounded by decreased availability in private loans (despite the fact that there are ample federal loans that students are often unaware of) may be compelling young people to use credit cards to pay for an education they otherwise don’t know how to afford.

But investing in the future is not all that’s getting young people knee-deep in debt; sometimes all it takes is overspending on a snack. Even those who believe they’re avoiding the pitfalls of credit cards altogether by sticking to debit cards and checking accounts now face a similar—if not more perilous—threat of debt and steep interest rates. While penalty fees have always been a necessary measure to keep credit card carriers from overstepping their lines of credit, recent years have seen the trend of banks—three quarters of the U.S.’s major banks, according to a recent New York Times article—slapping a line of credit onto checking accounts to automatically cover debit and A.T.M. overdrafts. This can result in charges that far exceed the original purchase—a close friend, for example, ended up paying $50 in overdraft fees for a cup of frozen yogurt she couldn’t quite afford.

However, Scott Talbott, chief lobbyist at the Financial Services Roundtable, an advocacy group for large financial institutions told the New York Times that ““Everyone should know how much they have in their account and manage their funds well to avoid those fees.”
While one could argue that Talbott is simply attempting to justify a hidden agenda of consumer manipulation, there’s no debating that he makes a good point. The fact remains that too many of us are spending money we don’t have, and too many of us don’t understand the implications of this until it’s too late. While thirty-eight percent of students in the Sallie Mae study obtained their credit card from a mail solicitation, nineteen percent admit to getting their referral from a parent. A 2008 survey conducted by the investment firm Charles Schwab found that while 55% of parents believe that learning how to manage credit cards is crucial for teenagers today, only 49% have taught their children about budgeting, and a mere 29% have explained how credit card interest and fees work. Meanwhile, only 54% of parents have explained the difference between “needs” and “wants” to their children, according to a 2008 survey from Capital One.

But it would be too easy, and far too limited, to put the brunt of the blame about irresponsible student spending on parents. Many parents are justified in their calls for schools to mandate personal finance education classes. But the epidemic of financial illiteracy in the United States, with its devastating symptoms revealed in the current economic crisis, points to a larger issue: it’s hard to talk about money. If we can avoid dealing with it directly, we usually do. We live in a society where economic value has evolved into criteria for social and moral judgment; consequently, the way we spend and consume is directly tied to our status and identity.

If financial literacy remains taboo, it falls to us to become proactive about educating ourselves when it comes to the money we have, we will make, and that we will spend. And we’re not as helpless as we’ve been made to think—if we can exhaustively research the unexplored nuances of the obscure topics that characterize the work of Wesleyan students in particular, I’m certain that we can commit time to understanding budgeting, credit scores, savings accounts, and other financial obstacles that most of us are certain to face—and that will be far more crucial to our continued success than any thesis or honors recognition—when we leave the bubble. Because, as a good friend once pointed out, nothing is worth the risk you take when you spend money you don’t have—even if it comes topped with sprinkles.

Domanick recommends the following resources and tips to make getting informed about your finances quick and easy:

  • JM

    I think it says something really sad and disturbing when wes students will debate the implications of a student government candidate that doesn’t actually exist, and whose supposedly humorous platform possesses all the wittiness and originality of a 14-year-old after his first hit, but can’t be bothered to so much as glance at the very non-hypothetical issues such as the ones this article points out that many of our peers will truly struggle with. But hey guys, so long as mom and dad are there to keep those accounts replenished, your only real money concern, anyway, is how much you want to shell out for your next Giant Joint. Keep navel-gazing in your mastubatory little bubble, Wes! Proud of ya!