Alcohol Consumption Puts College Students in Credit Card Debt


beer moneyAccording to the Trends in College Pricing 2010 report compiled by The College Board, the average estimated undergraduate budget❠for a   student during the 2010-2011 academic year is $20,339 for a four-year public school and $40,476 for a four-year private school. These numbers factor in tuition and fees, room and board, books and supplies, transportation and miscellaneous expenses. But do those numbers include the $500 a year that Rachel Barrington of the University of Wisconsin claims the average college student squanders on alcohol?

Gayla Martindale’s estimate in her article, A Look at the Spending Habits of College Students, posted on the stateuniversity.com blog is somewhat jaw-dropping: Each year, American college students spend $5.5 billion on alcohol.❠That’s a lot of money to be pouring down the hatch, especially in light of the fact that most students enter the workforce after having earned their post-secondary degree, carrying debt that they accrued along the way.

So how is the average, financially-strapped college kid affording all of this booze?

Some students spend using credit cards. In fact, most students â“ some 75% of females and about 70% of males â“ have 1-3 credit cards. The cost of teenage alcoholism is high, from the expenses they incur during their drinking sprees to the toll it takes on their health.  Plastic is used by many to charge school necessities such as books, supplies, and even tuition. Credit cards are relied upon by students for discretionary spending as well. While it can be advantageous for a student to begin building his or her credit score while still in school, the risk is that the temptation is there to fund fun nights of drinking with friends while sinking into a pit of debt.

According to a 2009 article published by Sallie Mae, entitled How Undergraduate Students Use Credit Cards, Undergraduates are carrying record-high credit card balances. The average (mean) balance grew to $3,173, the highest in the years the study has been conducted. Median debt grew from 2004’s $946 to $1,645. Twenty-one percent of undergraduates had balances of between $3,000 and $7,000, also up from the last study.â

At California State University Fullerton, workers in their administration office claimed that their institution sees more students discontinue their education due to credit card debt more often than due to academic failure these days.

The National Association of Scholars (NAS) uncovered in a 2009 article that A recent survey of more than 30,000 first year students revealed that nearly half were spending more hours drinking than they were studying.â

That means many college undergrads are opting to drink away dollars that would better serve them by being put towards school-related expenses. In turn, perhaps less drinking would result in fewer students dropping out due to their insurmountable debt.

If it’s true that, as Caralee Adams reports in her article Lack of College-Educated Workers Will Hurt Economy, Americans that have graduated college with a bachelor’s degree earn an annual salary that is an average of 74% higher than those earned by workers with only a high school diploma. Students who focus on overdrinking during college, rather than studying, may be doing much more than merely drinking away time and money that could otherwise have been better spent. They could very well be drinking away their future earning power.

photo by greencolander

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Written by JasonC

Jason Collazo is a Columbia University student whose interests include economics, personal finance, and marketing. This combination of studies helps the writer shine a unique perspective on the U.S. economy, consumer trends, and business competitiveness. He currently writes about business finance and technology for Forbes and regularly contributes to Business Insider. Aside from being a writer, Jason is also a member of Columbia’s NCAA Varsity Diving Team.

JasonC

Jason Collazo is a Columbia University student whose interests include economics, personal finance, and marketing. This combination of studies helps the writer shine a unique perspective on the U.S. economy, consumer trends, and business competitiveness. He currently writes about business finance and technology for Forbes and regularly contributes to Business Insider. Aside from being a writer, Jason is also a member of Columbia’s NCAA Varsity Diving Team.

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