Consumer Finance College Students And Credit Cards

Author : Benjamin D. Andrews
Publisher :
ISBN 13 :
Total Pages : 193 pages
Book Rating : 4.:/5 (1 download)

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Download or read book What's in Your Financial Package? Student Credit Card Use and Economic Insecurity in College written by Benjamin D. Andrews and published by . This book was released on 2017 with total page 193 pages. Available in PDF, EPUB and Kindle. Book excerpt: Since the turn of the 21st century, going to college has become increasingly financially difficult in the United States. Tuition prices continued to rise, state funding for higher education declined, and the mean family income declined or stagnated for all but the top 20 percent of families (Goldrick-Rab 2016). In a period where college has risen to be the preeminent way Americans can make a better life for themselves, it is becoming more difficult for Americans to pay for college. Financial aid does not cover as much of the price of college as it once did (Goldrick-Rab 2016), and college students are relying on financing methods like student loans more than ever before. Student loans, however, are not the only credit-based financial strategy college students use to pay for college (Manning 2000, 2005). With the explosion of consumer credit access from the 1980s to the 2000s, college students are using credit cards, many times to bridge gaps in their budgets as they try to pay for college. College students use credit cards to pay for both indirect expenses (e.g., food and housing) and direct educational expenses (e.g., tuition and books) as they pursue a college degree (Nellie Mae 2005; Sallie Mae 2009). While media, government, and scholarly attention has highlighted widespread college student credit card use (J. Manning 1991; R. Manning 2000; Norvilitis et al. 2006; Rubin 1998; United States General Accounting Office 2014), we know surprisingly little about differences in college student credit card ownership and use from a sociological perspective. This dissertation uses data from the Education Longitudinal Study (2002-12) and the Study on Collegiate Financial Wellness (2017) to understand how students respond to increased financial responsibility in college by taking on credit card debt, and how using credit cards influence their educational trajectories. The first two papers of this dissertation examine questions related to who uses credit cards, in what ways, and in what situations. I examine college student credit card use through differences in who owns a credit card, who carries a balance on their credit card, and who pays for tuition with a credit card. The third paper focuses on linking college student credit card ownership and use to educational outcomes, specifically that of bachelor’s degree attainment. Through the three empirical studies that make up this dissertation, I find that students from low socioeconomic backgrounds are more likely to practice risky credit card behavior like owning 2 or more credit cards and carrying a revolving credit balance from month to month, that students in financially precarious situations are more likely to pay for college tuition with a credit card, and that carrying a revolving credit balance decreases college students’ likelihood of attaining a bachelor’s degree. Findings shed light on how social shifts in higher education funding, and how students respond to them, influence the educational attainment process. Namely, students without proper financial support during college resort to risky means of paying for college that ultimately influence their educational outcomes.