Rising Debt Among Young Worries Experts

June 20 -- Ashlea Skiles of Somerset, N.J., got her first credit card during her freshman year in college when she was 18 years old.

After charging enough on that card to reach the limit, she decided to apply for another one to get more buying power. When that card reached its limit, she applied for yet another.

"It was like, 'This is maxed out, so I'll apply for another one,'" she says. "It was definitely me on my own not knowing what was I doing; paying my minimums every month; sending them whatever peanuts they wanted."

Now 23, Skiles has six major credit cards, four different store credit cards and $10,000 in debt. She has had to turn to a debt counseling agency to consolidate her bills to help her pay them off.

Like Skiles, many college students are finding themselves deeper and deeper in debt, say experts. Higher tuition and less money available for financial aid are making many college students turn to credit cards as an easy alternative source for cash.

Coupled with a dismal job market, this increasing debt load could mean financial trouble for many young people before they've even gotten a full-time job.

Part of the problem is paying for school. U.S. college students borrowed almost $47 billion in student loans during the 2001-2002 school year, according to The College Board, a New York-based organization of colleges and universities.

For the average student, borrowing has been on the rise in recent years. Students borrowed an average of $16,100 for education at a public four-year institution and $18,000 for a private-four year school during the 1999-2000 school year, according to statistics compiled by Reston, Va.-based student loan provider Sallie Mae.

That's a dramatic increase from $11,950 borrowed for public school and $14,290 borrowed for private education during the 1995-1996 academic year.

Credit Card Debt on the Rise

More and more, credit cards are becoming a way for students to bridge gaps in their finances. The percentage of students holding at least one credit card in 2001 rose 24 percent since 1998, according to the latest figures from student loan provider Nellie Mae. The median debt level among card-carrying undergraduates rose to $1,770 in 2001 from $1,236 in 2000, an indicator that more students are using their cards regularly and may not be paying off the balances each month.