Financial aid for college students, that is. With more and more parents finding it difficult to be able to fund little Johnny’s exponentially-growing education bill, the students themselves seem to be taking matters into their own hands.

According to a recent survey by private lender (and the nation’s largest provider of student loans) Sallie Mae, college students are using credit cards more than ever to pay for their education costs, and the balances on those cards have increased accordingly. Some of the findings of the study, from a press release by Sallie Mae:

• Approximately 30% of students charged their tuition on a credit card, up from 24% from 2004 (the last time the study was performed).
• A mere 17% percent of students indicated that they regularly paid off all credit cards monthly.
• Of the students surveyed, 84% had at least one credit card– half the students had four or more cards.
• Sixty percent expressed surprise at how high their credit card balance was, while 40% admitted to charging items that they knew they could not afford to pay.
• Ninety-two percent of undergraduate holders of credit cards charged textbooks, school supplies or other direct education expenses, up from 85% in 2004.

The data suggests that students are increasingly turning to credit cards for funding their education in place of private loans or grants. The reasons? Convenience perhaps, short-sightedness, even laziness; it’s easy to click the online payment button and worry about how you are going to pay it off later. And of course, the economic meltdown the country has been experiencing this past year is presenting families with additional challenges.

The bottom line is, it is still a poor solution to utilize credit cards to finance education. With interest rates frequently in excess of 15%, fees and charges can quickly become out of control. Even though it may take a few extra steps and time, funding higher education with scholarships, federal student loans (6.8% interest rate), or even private student loans (8% interest rate) are much smarter solutions. Readers, don’t you agree?

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