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Lindsay A. Robbins (The Utah Statesman via U-WIRE)/LOGAN, Utah -- Jamie doesn't let herself think about it. She can't. She'd go crazy if she thought about it. It hangs over her every day and dictates her life.

She works 60 hours a week to minimize it and has nothing to show. Jamie is supposed to be gloating in her graduation glory. After completing her bachelor's degree in graphics and Web design in August 2000, Jamie had great ambition and hope for the future. But it is holding her back. It is $33,000 of debt.

"I feel like an alcoholic. I don't know how to get it under control," said Jamie, who asked to be identified by a false name. "I knew I would have to pay the money back. I just didn't think about it."

With a combination of student loans and credit cards, Jamie became addicted to spending invisible money. A two-week dream vacation in Spain, a $400 Ovation guitar and name-brand ski equipment are still haunting her.

"I think where I really got in trouble was how much I spent on housing," Jamie said. "My friends always lived in nice places, so I did too, even though I couldn't afford it. And I am paying for it now."

Working 30 hours a week as a conference coordinator for Utah State University and 30 hours a week for Beaver Mountain Ski Resort, Jamie can barely cover her basic monthly living expenses of $820. Her student loans are due in March and she said she is already having major anxiety thinking of trying to make the payments.

"I have $33,000 in debt and two jobs that together make about $19,000 a year," Jamie said. "I just hope to be out of debt in maybe 10 years."

Jamie, not unlike many college students, worked only during the summers to save enough money for the Fall and Spring Semesters. She worked in a Kellogg's cereal factory running a combine, filling 1-ounce boxes of cereal for eight to 12 hours a day. She made $720 a week -- a lot of money for a young, single person. Jamie said if she had saved her money, she wouldn't have had to charge her housing or tuition.

"I always intended to have more money than I did," Jamie said. "I thought I could live off that, but I ended up with $1,000 left for the semester."

Jamie said she wishes she had a financial plan in the beginning. But like many other freshmen on campus, the last thing on her mind was a financial plan. Jamie said she signed up for every credit card offered on her campus, racking up free T-shirts and candy. Jamie didn't think twice when signing the dotted line, making thousands of dollars available with seemingly no consequences.

According to USA Today, a 1999 survey by American Savings Education Council found 7 percent of high school students and 55 percent of all college students have a major credit card. Nearly one-third do not pay their bills in full each month.

Angela Johnson just paid her last credit card payment three days ago and said it is the nicest feeling in the world. She is a 23-year-old Utah State University student who got her first credit card at age 18. She charged clothes and decorations for her new apartment, maxing out four credit cards.

"I have nothing to show for it," Johnson said. "I charged $1,000 on my first credit card. It took me three years to pay off."

Johnson said she wised up and began to understand the effect of credit cards and debt when she began working for Providian Financial in Salt Lake City two years ago.

"It hit me what 20 percent interest means on a credit card," Johnson said. "You are throwing money down the drain for nothing."

Johnson worked in the customer service department, receiving phone calls from people overwhelmed with debt. Johnson said most of the calls were made by either elderly people or people in their early 20s. Both groups are commonly coined by credit card companies as "high-risk" card holders. Johnson said such companies know they are going to make big money from students.

"They are the perfect targets. They need money and they need it quick," Johnson said. "Students don't have to tell Mom and Dad they need money for Mexico."

The American Institute of Certified Financial Planners reports that 10 percent of college students have at least $7,000 in credit card debt. Credit card companies are scrambling for a spot in the teen market that accounts for $158 billion a year, according to USA Today.

Johnson said she would like to see a person standing next to every credit card solicitor on campus explaining the real meaning of the fine print. She also would like to see financial planning workshops available on campus. Johnson said universities that allow credit card companies to solicit on campus must bear some of the blame for student debt.

Jamie takes full responsibility for her debt but said she was tempted by how easy it was to get credit.

"I know it is my fault, but I would have liked credit cards not to be so available," Jamie said. "They're everywhere."

Utah State University does recognize the problem of credit card solicitation on campus and is re-examining its current policy.

Craig Simper, an attorney for Utah State University, is a legal adviser to the USU Committee to Review Distribution of Goods and Services on Campus.

According to Simper, the USU Alumni Association sponsors a credit card issued by First USA Bank. The Alumni card is the only card allowed to be advertised on campus, said Scott Olsen, assistant director of Alumni Relations.

Alumni Relations receives a bonus from First USA Bank based on the number of card holders. The bonus money, which is about a quarter of a percent of what card holders spend, is placed in a university scholarship fund, Simper said. Olsen said the money was also used for Alumni Relations activities and programs. Simper said the card is a good choice for students. Most students are going to have credit cards anyway, and it would be nice if it could benefit the university as well, he said. Alumni Relations holds a credit management workshop presented by First USA Bank to inform students of responsible credit card use. USU wants to help students limit their debt and learn how to use a credit card properly, Simper said.

Tawnee McCay is the director of Housing and Financial Counseling at the Family Life Center, a HUD approved housing and financial counseling agency. McCay said she has seen credit card solicitors on school campuses and would like to hang posters next to them stating the real effect of credit.

"Kids shouldn't be so bombarded with advertisements," McCay said. "School environments shouldn't be so heavily advertised."

In her research, McCay has found that most high school and college students with a credit card don't even have basic knowledge of good money management. Counselors at the Family Life Center are devoted to educating people about good money management skills and warning them of the deadly spiral of debt.

"Most people have no idea about financial planning," McCay said. "People can dig deep holes without knowing how interest works."

She gave an example of a credit card debt of $3,000 -- well below $7,000, the national average of debt for college students. Paying only the minimum payment of 2 percent of the principal per month at 18 percent interest annually, a student would pay the initial bill for 29 years and six months, paying a total of $10,013.

McCay said she sees students who get credit cards, plan to pay the minimum monthly payment and don't realize that only about 5 percent of their payment actually goes toward the principal. This lack of education is how many students get in trouble in the first place and continue to stay that way for the rest of their lives, McCay said. She would like to see more education in the classrooms to teach children and young adults about good money management.

In an article in The Salt Lake Tribune, William Stillgebauer, a clerk of the U.S. Bankruptcy Court for Utah, said bankruptcies in Utah soared to a record 15,138 cases in 2000. McCay said she believes the number of bankruptcies correlates directly with poor financial education of young people in Utah. Some economists suggest the reasons for such high numbers are Utah's large families and low per-capita income, but McCay doesn't entirely agree.

"I think Utahns have a bad case of keeping up with the Joneses," McCay said. "Everyone wants to have what their neighbors have, even though their finances cannot possibly pay for it. Students aren't an exception."

McCay said students and young people need to know how to follow a budget, know what a mortgage is and how interest works. McCay believes the Family Life Center and basic financial education are keys to solving the burden of debt among college students and the growing number of bankruptcies in Utah. She would like to see USU's Family Finance course be highly recommended or required. She also recommended that anyone in a financial situation similar to Jamie's seek financial counseling.

(c) 2001 The Utah Statesman via U-WIRE

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