Credit Card debt on college campuses, causes, consequences, and solution.
b) Background of the problem and key statistics of the problem
Notably, the demand for furthering education among the young people resulted to establishment of support funds for them. Indeed, as Leila, indicates, the administration sees the support for young people being very critical as a mechanism to maintaining high levels of literacy and securing the nations future. According to Sallie Mae (2), about US 180 billion is available for students in the country. Sallie Mae (3) further indicates that by the year 2004, about 84 of the total number of students, which represented an increase with 8 from the previous year, had at least one credit card. Notably, about 21 of the total undergraduates had a mean balance ranging between US 7,000 and 3,000 (Sallie Mae 3). According to the data collected by Sallie Mae (5), the average amount of debt that undergraduates increased drastically from the year 2004 with about 46 to reach US 3,173 in the year 2008. Besides, the senior students also have higher levels of credit card debts compared to the freshmen. One major question that has gone unanswered is why indeed the problem is highly prevalent among the students in the nation.
c) Causes of credit card debts
According to Dicker, a credit card debt is largely caused by the behavior assimilated by the credited card issues in the nation. Notably, as Dicker continues to say, due to the open and poorly regulated mechanism of regulating the card issue, competition from the different issuers is indeed resulting to be very harmful. Particularly, the periods of economic sluggishness sees the colleges being a major target. Therefore, to the issuers, the students form key consumer base with massive potential to promote their businesses. As indicated earlier over US 180 billion is held by the students every year (Salle Mae 2). In addition, various companies are always providing key promotions to encourage the students spend the little they have without providing them with the necessary advise on how to manage the credit in them.
In addition there are poor legislations that governance of credit card operations in the nation. Indeed as Silver-Greenberg and Dicker concur, the government has failed to establish the correct mechanists that can regulate the mechanisms of credit card usage and the actual behavior of the credit companies for the different systems of management in the country. While indeed several bill are awaiting passage in the in the house, none of them have been passed into law. Therefore, as the credit card companies continue pursuing the students to make the different purchases, analysts have indicated the need for key concerns in the management.
It has frequently been argued that students lack the necessary skills to manage their credit cards credits. Indeed as Greenberg reports, majority of the freshmen usually experience their first credit cards when they get to colleges. However, even those that have had the credit cards before, they lack adequate skills to mange limited resources. Through a large number of students indeed handle their credit cards well there is great deficiency of education on credit cards use among them.
As indicated by Leila, most of the students rely on the credit provided by the government to make their end meet. However, it is no doubt that the resources available for their disposal are highly limited against a myriad of expenditures they have to make in their studies. Jonathan reports that the credit provided to the students of about US is divided into major expenses such as fees, commuting costs, textbooks expenses, tuition, room and board, computer related costs and other costs incurred by the students. As a result, it is critical that effective planning education is provided for effective preferential budgeting.
d) Consequences
Notably, the implications of Credit card debts are very immense to students, the credit card companies, and even the education system. To begin with, the students usually get themselves broke and cannot afford key student supportive items. Therefore, they are forced to pursue the remaining part of the education session with insufficient services that has extended implications. In most of the cases, they are disturbed psychologically as they lack the necessary tools for their education. This becomes critical especially when others have the facilities they lack. Indeed, Regina (85-86) indicates that it turns into a major psychological concern and culminates to stresses which if not treated effectively can lead to depression. On a long term consideration, the students with high credit card credit are debts are bound to record low grades in the country. Despite the key miseries affecting the students, they are also fined heavily by the credit companies which are deducted upon the next loading of the credit cards (Jill).
Though the credit companies have a key niche to male major profits form the students, delayed payments are indeed a source of losses to them. Dicker indicates that following the key implications that credit companies are getting from delayed payments, some of them are contemplating changing their strategies of dealing with the students debts. Dicker further reports that it is indeed dawning to them that there need for cooperation to with the education institutions to address the problem by providing the necessary information to them.
Nationally, credit card debts are an indication of problems and disasters. Once college students have gone bankrupt, they easily get into bad peers where drugs abuse and alcoholism becomes the order of the day. Therefore, major problems related to violence, theft, and other societal la-adaptive behaviors are common to them. Failure to address this problem effectively has been projected to have possible key negative long term implications to the country (Regina, 51-52).
e) Addressing the problems of the credit card debts
As indicated earlier, addressing the problem of the rampant credit card problem in the country is very crucial to the young people in the colleges, the education system, the credit card companies and the nation as a whole. One of the most advocated methods for addressing the problem is educating the students on the best methods of managing their credit cards. As indicated earlier, the main cause of credit card debts is poor knowledge of how to manage credit by the students. All the credit card companies should assimilate the crucial role of educating their students on the best mechanisms of using credit cards (Jill)
It is critical that the government employs key policies that can help to address the problem in the country. Particularly, it is critical that the behaviors of the credit card companies are addressed to facilitate effective non exploitative relationship between them and students. Under this consideration, the credit card companies should be made responsible for periodic effective credit card info I relation to their policies and possible changes.
Regina (45-46) indicates that cooperation between the credit card companies, colleges, and the government should be improved to formulate clearer understanding and problems solution related to the students credit card mannerism. It is particularly crucial that the amount of credit provided for the students is adjusted upwards to reflect the changes in the economic progression of the nation and globally too.
It is from the above discussion that this paper concludes by supporting the thesis statement, credit card debts form one of the most distressing issues to the students and the society in that it culminates to great losses to companies and penalties to the credit card holders. It came out clearly that credit card debt have strongly entrenched itself strongly to all the students in the nation. Besides, the implications are equally highly profound and projected to all the people. It is therefore of critical importance key solutions are assimilated with speed to facilitate a better learning environment and a future for the nation.
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