There’s a lot of grim news for college students lately.

Tuition — which has been rising faster than inflation for years — is getting ready to take off even more, as states battle huge deficits. Families are struggling in the recession and having a harder time paying for school. And now comes a new report that shows students are putting their educational costs onto credit cards more often — typically the most expensive option available.

The report from Sallie Mae says almost 30 percent of college students report using a credit card to pay tuition in 2008. Ninety-two percent used a card to buy books or cover other educational costs. Both are sharp increases over the last survey, in 2004.

It adds up to an ugly picture. Here’s the take of one writer at Wallet Pop:

“It’s likely that 2009 (card debt) could look a little bit worse,” says Marie O’Malley, Sallie Mae’s director of consumer research.

A little bit worse. Let’s see: The economy has absolutely hit the bricks over the past year, and student loan availability has dried up — along with the home equity that so many parents were using to help kids pay for college. Meanwhile, college costs have continued to rise and endowments and state aid have plunged.

It could be a little bit worse than a little bit worse. It could actually be a lot worse than a little bit worse. It could be downright terrifying. Add in the fact that students are entering one of the toughest job markets in history with those credit card balances — at usurious rates that are increasing even more — and Gen Y’s post-collegiate financial picture could be a real doozy — not to be a Chicken Little or anything like that.

 

Here’s the news release from Sallie Mae, and here’s a link to the full report. A summary of key points follows:

• Nearly one-third (30 percent) put tuition on their credit card, an increase from 24 percent in 2004, when the study was last conducted.
• In total, 92 percent of undergraduate credit cardholders charged textbooks, school supplies, or other direct education expenses, up from 85 percent in the previous study. Students who used credit cards to pay for direct education expenses estimated charging $2,200, more than double 2004’s average of $942.
• Eighty-four percent of undergraduates had at least one credit card, up from 76 percent in 2004. On average, students have 4.6 credit cards, and half of college students had four or more cards. The average (mean) balance grew to $3,173, higher than any of the previous studies. Median debt grew from 2004’s $946 to $1,645.
• Only 17 percent said they regularly paid off all cards each month, and another 1 percent had parents, a spouse, or other family members paying the bill. The remaining 82 percent carried balances and thus incurred finance charges each month.
• Eighty-four percent of undergraduates indicated they needed more education on financial management topics. In fact, 64 percent would have liked to receive information in high school and 40 percent as college freshmen.

 

The average college student has 4.6 credit cards? Besides the growing and excessive burden of student loan debt, this rise in consumer debt is another obligation that will follow these kids for years and years. Meanwhile, the recession is driving decisions that will likely lead to more, not less, debt tied to the typical college degree.

Have you — or your children — had to turn to consumer credit to pay for college? Isn’t there a better way to make a higher education available to those who can’t afford it?