RESTON, Va., Oct. 2 /PRNewswire/ -- Now more than ever, men and women
are seeking graduate and professional degrees as a way to advance their
careers -- whether it's returning to college while working at a full-time
job or going straight to graduate school following undergraduate studies.
The payoff for the additional education is significant: Individuals with a
master's degree earn on average $1.8 million more over their lifetime than
that of a high school graduate, while those with professional degrees earn
almost three times as much as high school graduates earn over their working
lives.
(Logo: http://www.newscom.com/cgi-bin/prnh/20030617/SLMLOGO-a )
At the same time, a new study suggests that in addition to earning an
advanced degree, graduate and professional students also need an ongoing
educational lesson on budgeting and managing their money.
"By and large, these are savvy students who have undoubtedly weighed
the benefits and costs associated with a graduate education and have
elected to attain an advanced degree to better themselves and increase
their earning potential," said Marie O'Malley, spokesperson for Nellie Mae,
a leading originator of federal and private education loans and the company
that conducted the study. Nellie Mae is a wholly owned subsidiary of Sallie
Mae, the nation's leading provider of saving- and paying-for-college
programs.
"However, their responses and behaviors indicate that many of them
still need information on reducing credit card debt, financing graduate
school, and managing money," she says.
Findings from Graduate Students and Credit Cards in 2006: An Analysis
of Usage Rates and Trends shows that older graduate students carry nearly
twice as much credit card debt as their younger counterparts, with just 20
percent of all respondents paying off their monthly credit card bills in
full each month. Moreover, the average outstanding balance on credit cards
held by graduate students has increased 10 percent since 2003 --- to
$8,612.
The study sheds light on the fact that increasing numbers of graduate
students are using credit cards to finance a college education. An
overwhelming majority -- 94 percent -- of graduate students who responded
to the Nellie Mae survey said they used credit cards to pay for some
portion of their direct education expenses, primarily textbooks.
Twenty-eight percent admitted paying for some portion of their tuition with
credit cards. O'Malley warns that such usage may be unwise in that variable
interest rates on credit cards average more than 14 percent (Source:
Bankrate.com, July 2007).
"Student loans are a much wiser financing choice for qualified
education expenses than credit cards, because they offer built-in deferment
options, low (often subsidized) interest rates, and financial incentives
for making on-time payments," she said.
Additional findings from Graduate Students and Credit Cards in 2006: An
Analysis of Usage Rates and Trends include the following:
-- The majority of graduate students, 67 percent, said they took out their
first card as an undergraduate student.
-- Of the graduate student survey respondents, 93 percent would have liked
more information on financial management topics before they started
school and would like financial management education now.
-- The most common direct expense for which graduate students used their
credit cards was textbooks, with 83 percent indicating they had charged
some portion of their textbook costs.
-- Of the 28 percent who said they used credit cards for some portion of
their tuition, the average amount charged for direct education costs
was estimated at $5,416, almost double the overall average amount
estimated for direct education costs placed on credit cards; 26 percent
of those who used credit cards to pay a portion of their tuition
charged at least $7,000.
"The upward trajectory of credit card debt levels as these students
remain in graduate school demonstrates the need for better planning and
budgeting before graduate school begins and as underclassmen," said
O'Malley. "Ideally, this group should have ongoing access to financial
management education and tools, and receive counseling about their
financial aid options each semester."
Graduate Students and Credit Cards in 2006: An Analysis of Usage Rates
and Trends is available online at http://www.nelliemae.com/library/research.html.
SOURCE Nellie Mae
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Related links:
http://www.nelliemae.com/library/research.html
http://www.salliemae.com
Photo Notes:
NewsCom: http://www.newscom.com/cgi-bin/prnh/20030617/SLMLOGO-a
AP Archive: http://photoarchive.ap.org
PRN Photo Desk, photodesk@prnewswire.com
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CONTACT:
Beth Guerard of Sallie Mae, +1-703-984-5621
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