Wednesday, September 5, 2007

Major Debt

Business Week has a back-to-school article that's a bit sobering. It reminds us how credit card companies sell their lending products to college students -- sometimes at rates as high as 16 percent:

Students also live in a culture of debt. Many of them are borrowing tens of thousands of dollars to go to school, tapping low-interest loans to pay tuition. "The primary way we help students pay for college is by telling them to take on more and more student loan debt," says Tamara Draut, director of the Economic Opportunity Program at Demos. The message is clear, she says: "Debt is O.K., and you are going to have lots of it." In that context, [Central Washington University student Seth] Woodworth and other students think little of charging another $50 for dinner or groceries.

I know I've linked to Elizabeth Warren's article in Democracy before, but it's worth linking to again. She explains how consumers have essentially abdicated all their negotiating power to big companies, who can refuse their products if customers don't agree to their ridiculous terms.

Cross-posted at

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