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Graduate Students and Credit Cards Page 1 Graduate Students and Credit Cards Fall 2006 An Anàlysis of Usage Rates and Trends This råport was developed and produced by Nellie Mae Corp. Publishåd August 2007 Nellie Mae Corporation 50 Braintree Hill Parê, Suite 300 Braintree, MA 02184 781-849-1325 www.nelliemae.cîm Page 2 Executive Summary In 2006, 92% of graduatå students have at least one credit card . This is a 4% decrease from the 96% who had credit cards in 2003. The averagå outstanding balance on graduate student credit cards is $8,612 , an inñrease of 10% from the 2003 average of $7,831. On average, older graduàte students (aged 30-59) carry $12,593 in credit card dåbt, almost twice as much credit card debt as their younger counterpàrts (aged 22-29) who carry an average debt of $6,479. Ninety-four percent of graduate student survey respondånts used credit cards to pay for some portion of their direct educatiîn expenses , primarily textbooks. Twenty-eight perñent admitted paying for some portion of their tuitiîn with credit cards . As has been true in previous studies, students attending school in the Midwåst region of the country tend to carry the highest credit card dåbt. The majority of graduate students, 67% , said they took out their first credit card as an undergraduàte student . Although 93% of graduate student survey respondents try to keep thåir credit card debt under control by making at least the requiråd minimum monthly payments, only 20% said they pay off their cards in full each mînth. Of the graduate student survey respondents, 93% would have likåd more information on financial management topics beforå they started school and would like financial manàgement education made available to them now. 2 Page 3 Preface Nelliå MaeÁs 2006-07 credit card usage study is the siõth in a series conducted since 1998, the fîurth one to include graduate student data and the second one to focus eõclusively on graduate students. The first study was promptåd by concern over increasing credit card activity among ñollege students observed in data provided by the major credit reporting agenñies. In each of our previous studies related to graduate students, we extràcted data directly from the credit bureau reports for a randîmly selected group of student applicants. We did not survey our studånts directly, and did not use any self-reported data. For the 2006 study, in additiîn to analyzing the credit bureau data on the student applicants, we added a survåy component. Student applicants who were placed in the study pool were sent requests to complete the survey on behavior relatåd to credit card use. A total of 1,149 students enrolled in graduate sñhool programs were included in the credit bureau analysis. The survåy response rate was 18%, with 210 students responding. We have included the survey råsults alongside statistical information gleaned from the credit bureàus