DEBT MANAGEMENT Loans, credit cards burden new college grads

New graduates are struggling with student loans and credit card bills.
DALLAS MORNING NEWS
When Jason Sutton graduated in 2001 from Texas Christian University, he had more than his bachelor's degree in psychology to take with him.
He also had tens of thousands of dollars in debt.
Today, studying for a master's degree in community counseling at the University of North Texas, Sutton is trying to pay off about $8,000 in credit card debt and $30,000 in student loans.
"I got hired by Bank One right out of college and was making about $20,000," said Sutton, 24. "It was really difficult because of the debt. I already had rent and utility bills to pay, so that added to the financial issues."
For many college seniors, independence is just around the corner as they prepare to suit up for graduation. But even before many of them earn their first real paycheck, the debt albatross is slung around their neck.
Significant increase
Undergraduate student loan debt has increased significantly since 1997, according to Nellie Mae, a major lender of higher education loans.
Last year, graduates of public colleges left school with an average of $17,100 in student loan debt, up 57 percent from 2001. Students left private colleges with an average of $21,200, up 38 percent from 2001.
This isn't to say that student loans are bad. They're an investment that will last a lifetime.
But they're increasing at the same time that students are carrying credit cards in record numbers. The percentage of students holding at least one card rose from 67 percent in 1998 to 83 percent in 2001, according to Nellie Mae.
One bright spot: College students carried an average credit card balance of $2,327 in 2001, down 15 percent from the 2000 average, the company says.
Still, add that to student loans and you have graduates starting their careers with an average of $20,402 in debt.
"It's a very serious issue because, for one, the college graduate may not always land that high-paying job that they anticipate they'll land," said Kevin Williams, a counselor at Consumer Credit Counseling Service of Greater Fort Worth in Texas.
"Then they have their student loans, which come due along with credit card payments, and it can make it very difficult for them to repay their debt and afford other necessities."
Can't find jobs
This all comes at a time when newly minted college graduates are having trouble lining up jobs.
Unemployment has been a problem for a couple of years, with no relief in sight. Employers plan to hire about the same number of new college graduates this year as they did last year, according to the National Association of Colleges and Employers in Bethlehem, Pa., which tracks the employment of college graduates.
For graduates, it's a rude awakening to emerge from the protective cocoon of college and parents into the real world, where they have to find a way to live on a greenhorn's salary.
"I need to hurry up and find a salaried position so I can start preparing for life when it comes down to getting mutual funds and hopefully to start a family someday," said David Young II, 23, who graduated in December with a bachelor's degree in kinesiology from the University of Texas at Arlington.
He's working as an athletic trainer, but he's paid hourly and doesn't have employee benefits.
"Right now, I'm paying just the minimum on my credit cards," Young said. "The interest kills me right now."
He's more fortunate than many of his peers. Many recent college graduates have had to move in with Mom and Dad because they're burdened with debt and have few job prospects.
Outsourcing firm Challenger, Gray & amp; Christmas Inc. has coined a term for their situation: "sad-grad."
If you're a new graduate in debt, the first thing you need to do is create a budget, or spending plan.
"If you don't have a plan, you're like a ship without a rudder," said Marianne Gray, president of CCCS of Greater Fort Worth. "You want to have a goal and feel like you have a secure financial future."
Sutton can attest to that.
"You have to control your spending a lot more and you have to realize that you have a rent check due, you have groceries to buy, you have bills to pay," he said. "You really can't go out and blow money."