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Students racked up trillions in school debt, more than US credit cards. Can it get worse?by Circa Campus
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WATCH |Credit cards, how much do you really know? Circa Campus takes a tally. 

Gaining credit and credit scores are now more important than ever. Colleges have not educated the next generation on how to properly manage money, credit and all that comes along with debt and interest rates. So in an attempt to protect consumers, the CFPB (Consumer Financial Protection Bureau) was put in place, but this protection measure may not be in place for long.


A report by Fed Data and The New York Times indicates that the percentage of Americans under the age of 35 that held credit cards has dropped to its lowest level since 1989. A deeper dive into the study shows that the survey focused on asking the audience about their balance month to month.  

According to Nilson report,of 600 students aged 18-24 demonstrated that at least 70 percent of students in the U.S. had at least one credit card. Of those, 72 percent had completely paid them off.


"It's pretty clear that young people are not interested in becoming indebted in the way that their parents are or were."

David Robertson, The Nilson Report

An Equifax survey polling 600 students can paint a clearer picture about the mentality and behavior of millennials and their credit card usage. Students of the survey understood the importance of developing a credit score and they also had an understanding of the factors that impact the score. The respondents to Equifax survey correctly identified "paying bills on time (73%), amount of credit card and loan debt (66%), the types of credit cards and loans (59%), the length of credit history (55%), and opening a new credit account (51%)” as factors that influence their scores. 

The millennial generation is taking on credit differently than their parents. Credit cards are not the only aspect of a credit score for college students. College loans and interest rates are a major factor contributing to the hurting educated population.

“Americans owe over $1.4 trillion in student loan debt, spread out among about 44 million borrowers. That’s about $620 billion more than the total U.S. credit card debt," according to Student Loan Hero which aggregated this information using sources such as the Federal Reserve. 

Interest rates and payments are now just as much of a concern as the loans themselves. If you take out a $10,000 loan with 6 percent interest, that constitutes paying $3,300 in interest on that loan. These rates have been on the rise for a few reasons, as cited by NerdWallet. If you borrowed at the wrong time and the co-signer did not have outstanding credit history, or you have applied for multiple loans, there will be a problem. However, the CFPB was set up to protect the consumer in the wake of the financial crisis of 2007. 

This agency’s work “is particularly important for people who don't have a lot of money. And that includes young people who are just starting out in their careers,” says Carter Dougherty of the Americans for Financial Reform organization.

Sen. Elizabeth Warren, the founder of the CFPB, warns that the “CHOICE Act will unleash big banks and put the financial market on shaky ground.” The CHOICE Act is still not the law of the land, but speakers of both Houses vocally support it.

The millennial generation, as mentioned by The New York Times report, “just aren’t pulling out the plastic like they did in the past.”

Though colleges continue to fail at money education, spectacular resources have surged online that are paving the way for credit education such as Equifax, which published a report, along with their study, that outlined the do’s and don’t’s of credit cards. 

There are safety nets in place to protect students, but this may not be the case for the future. However, the next generation is more poised than the previous to succeed in the credit realm, but only time will tell.

(The article was provided by Circa Campus in partnership with GenFKD which has fellows on college campuses around the nation. Circa Campus Contributor: Nicole Soto )