A rising number of UW-Madison students are indulging themselves heavily in the carefree ways of college life — and they are doing so with plastic money.

“We have seen more students with larger debt problems over the past few years,” said Chuck Ritter, a credit counselor for Madison-based Consumer Credit Counseling Services. “I think the number of students [with debt] has steadily increased over time, though not drastically. However, we have seen the amounts of debt on a student-by-student basis go up.”

Credit cards are only a fraction of the problem. Many students find themselves having to cope with the high-interest, short-term credit loans and also with large amounts of long-term student loan debt.

Susan Fischer, Associate Director of Student Financial Services WHERE?, helps students whose spending habits have left them in debt.

“It always boils down to ‘don’t live beyond your means,'” Fischer said. “[Credit cards] are not evil; they’re good tools, but as financial aid advisers, we’re very concerned over students borrowing from their futures.”

Hard data on credit card debt is difficult to pinpoint because most organizations do not want to violate their clients’ privacy, Fischer said.
The Consumer Federation of America, a national consumer interest group, released a study performed in conjunction with several East Coast universities revealing that at some schools average total debt is over $20,000 per graduating senior.

According to the 1999 study, the number has increased steadily over the past two years due to rising college costs.

Debt is not a new phenomenon. Students continually spend money they do not have, Fischer said.

“We have seen students here for over fifteen years,” Fischer said. “It certainly isn’t going away.”

She said UW students are near the national mean for student loan debt.
“The average debt of graduating seniors who took student loans for the 2000-2001 academic year was $15,140,” Fischer said. “But remember, that figure does not include other private loans or credit card debt. I’m confident there are students at this university in much worse shape.”

Ritter said the rising cost of education is not the sole cause of student debt. Spending habits also play a large role.

“Put simply, if you can manage your money better, you can get rid of the debt,” Ritter said.

The most frequent issue Ritter addresses with student clients is indulgent, or unnecessary, spending, he said.

“It’s usually entertainment — clothes and entertainment,” Ritter said. “Students are making payments on credit cards, and most of it ends up being interest payments. They come to us and say ‘I’m sending money and not seeing any progress’.”

He said students who find they cannot handle their current situation should not be intimidated by asking for help.

“We usually send [students] forms to fill out so we know about their finances … things like income, normal payments, list of debts,” Ritter said. “Then we will sit down and try to work with spending.”

Ritter said students do not understand what it really means each time they pay with a credit card.

“I think it’s a combination of not having a lot of money on hand,” he said. “It is easy to forget that you’ve got to pay it all back, with interest.”

UW senior Tom Sorenson, set to graduate next December with a bachelor degree in theater, agrees.

“I’ll be about $17,000 in debt when I graduate,” Sorenson said. “Though most of that is student loans, I know first hand about credit card struggles.”

Sorenson has coped with significant debt for years.

“About a thousand dollars of my credit card debt started when I took a trip to New York for the millennium celebration that I couldn’t pay for at the time,” he said. “I tend to live at the end of my means.”

Sorenson has had to find creative solutions to fix the problem he is in.
“Last year I sold my body to a scientific experiment that brought in $1,500,” he said. “That might not be an option for everybody, but I would recommend it. I didn’t have any reactions.”

Despite his lagging economic situation, Sorenson is optimistic about his future and offers advice to any students struggling to make good financial decisions.

“If you get the chance to do something you can never do again, or you just need to pay for school essentials, then don’t worry as much about the debt,” he said. “But if you’re going to whittle away money on small things that you just want, you’re going to find trouble.”