2008 Woodie Awards
Tough Lessons of Credit: Coping with College Costs
Phyllis Furman
Issue date: 5/3/05 Section: News
When Lakesha Hauser went off to Utica College, her mother warned her against signing up for credit cards.
She didn't listen.
Without her parents knowing, Hauser loaded up with four pieces of plastic and now she's paying the price. The 24-year-old East Harlem resident neglected to pay up on one of them, and three years after graduation she's being hounded by her credit card company.
Hauser, who holds an entry-level administrative job at insurance giant CNA, has been told by an attorney that she owes $2,000 and must pay it all- now. Her savings and checking accounts have been frozen and she says she doesn't earn enough to pay off her debt all at once.
"I haven't written a check in months and it's getting harder and harder to pay bills," Hauser said.
Remarkably, Hauser ran up the big college tab, not on spring break vacations in Cancun or jewelry, but on basics like books, toiletries and food.
She's hardly alone. As credit card companies ramp up their efforts to lure young people, more than 80 percent of college students are now flashing plastic and nearly a third have four cards or more.
"Credit card companies are all over campuses," said Howell Edwards of nonprofit credit counseling agency InCharge.
Many young adults simply can't pay their bills. In recent years, the country has seen a more than 50 percent increase in bankruptcy filings among people under the age of 25.
That bodes poorly for their future. Excessive debt and inability to pay can lead to damaging credit reports that can hurt young adults later on in life when they try to buy a car or rent an apartment, said Clare Stenstrom, a financial planner with Bourne Stenstrom Capital Management.
Nonetheless, experts offer hope and guidelines even for people in situations like Hauser's.
- Keep the lines of communication open: "Show that you are in good faith towards repayment," said Michael Anderson of financial planning firm Evensky & Katz.
She didn't listen.
Without her parents knowing, Hauser loaded up with four pieces of plastic and now she's paying the price. The 24-year-old East Harlem resident neglected to pay up on one of them, and three years after graduation she's being hounded by her credit card company.
Hauser, who holds an entry-level administrative job at insurance giant CNA, has been told by an attorney that she owes $2,000 and must pay it all- now. Her savings and checking accounts have been frozen and she says she doesn't earn enough to pay off her debt all at once.
"I haven't written a check in months and it's getting harder and harder to pay bills," Hauser said.
Remarkably, Hauser ran up the big college tab, not on spring break vacations in Cancun or jewelry, but on basics like books, toiletries and food.
She's hardly alone. As credit card companies ramp up their efforts to lure young people, more than 80 percent of college students are now flashing plastic and nearly a third have four cards or more.
"Credit card companies are all over campuses," said Howell Edwards of nonprofit credit counseling agency InCharge.
Many young adults simply can't pay their bills. In recent years, the country has seen a more than 50 percent increase in bankruptcy filings among people under the age of 25.
That bodes poorly for their future. Excessive debt and inability to pay can lead to damaging credit reports that can hurt young adults later on in life when they try to buy a car or rent an apartment, said Clare Stenstrom, a financial planner with Bourne Stenstrom Capital Management.
Nonetheless, experts offer hope and guidelines even for people in situations like Hauser's.
- Keep the lines of communication open: "Show that you are in good faith towards repayment," said Michael Anderson of financial planning firm Evensky & Katz.