Xavier Magazine

Climbing Mt. Debt

College students nationwide are facing a problem more daunting than anything the toughest professor can dish out—credit card debt. According to a 2000 analysis done by student loan provider Nellie Mae, 78 percent of students age 18-25 now have at least one credit card, up from 67 percent in 1998, and they’re graduating with $2,748 in credit card debt, up from $1,879. Calculating an annual percentage rate of 18 percent and making only the minimum monthly payments, it would take a student 15 years to pay off the card. It’s a plague that’s infecting campuses around the country, including Xavier.

The problem, say those familiar with the issue, is twofold: the student’s financial inexperience, and changes in lending regulations in the early 1990s that now allow 18-year-olds to obtain credit cards without a parent’s cosignature.

Following the legal changes, banks and credit card companies began working their way onto campuses. Today, they see college students as a prime market audience. They staple application forms onto classroom bulletin boards right next to the roommate-wanted signs and movie posters. They have telemarketers call the dorms, offering immediate approval over the phone. They set up tables on campus and at popular spring break destinations, baiting students with incentives such as free shirts or hats to get them to fill out an application.

“They’re dangling toys in front of them to get them to sign,” says Tom Barlow, Xavier’s director for auxiliary services. “I did not feel Xavier should condone solicitations that could cause harm to the students.”

Barlow has taken Xavier further than many colleges in an effort to counteract this growing trend. Credit card solicitations are prohibited on campus. If students want a credit card, they should make the decision after talking to their families, not after being sweet-talked by marketers. He’s also helped create the financial aspect of the University’s wellness program.

“People usually think of wellness as mental, physical and social, but one of the central aspects of wellness is financial,” Barlow says. “The most miserable thing a person can do is get in a hole and find they’re not financially stable.”

Students at Xavier would soon agree. members of the student government association worked to keep solicitors off campus and to make sure telephone information isn’t sold to companies, says SGA president Mark Mallett, a senior. Mallett’s seen firsthand the effects of the presence of credit card companies on a campus—he has friends who are inundated with phone calls and personal solicitations. “I know one guy in particular who got two cards and used them,” he says. “Now he’s paying them off and wishing he had never gotten them.”

Another way the University is working to keep students financially healthy is through the All Card—the student ID card that doubles as a prepaid money card. “The key factor is it’s a prepaid debit program, not debt,” says Barlow. “It was established after a parent focus group met in 1993. Parents today still feel very strongly about Xavier only doing prepaid debit type programs.” The All Card Center, in conjunction with Firstar Bank, offers free workshops each semester to teach students good financial management. Topics include Your Credit History, Spotting Credit Trouble and Creating Good Credit.

Offering financial management assistance is a part of Firstar’s duties as the University’s official bank, no matter what bank the student uses.

“Students who find themselves in credit card debt can come to us and ask us for advice and we’ll sit down with them and come up with a solution,” says Jim Marshall, Firstar’s senior vice president of group banking. “There’s a concept in student wellness that students shouldn’t be behind the eight ball when they leave. Xavier takes a concentrated look at what students should and shouldn’t be leaving college with, and they shouldn’t be leaving with a lot of debt.”

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