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					Sierra College Students and the Burden of Credit Card Debt




                         Jane Doe

                        John Jones

                        Sally Smith
                                          I. Introduction

       People use credit cards for many reasons. While some use them only for emergency

purposes or important purchases, others use them to purchase things that they might not really

need. This may be fine for those who can afford to pay off the balance each month, but for those

who cannot and are using credit cards to live beyond their means; this can become a big problem.

Credit card debt can get out of hand quickly as people do not realize how much money they are

spending until the monthly bill arrives and then they only make the minimum payments. This

can cause a person to become buried in credit card debt without them even realizing it and once a

person is in debt it can be difficult to climb back out. This is especially true with younger

people, such as college students, who may not know the dangers of credit card debt and just see

credit cards as a way to get things now without having to worry about paying for it until later.

While some students use credit cards to pay for necessities such as tuition, books, and other

school supplies, there are those who use them on frivolous purchases such as clothes, eating out,

video games, etc. Herein lays the danger as these students can find themselves in debt before

they are even finished with college. Knowing this, we wanted to find out how many Sierra

College students were already in substantial credit card debt in order to see if there is a problem

with credit card debt here at Sierra College, and if there is a problem, how bad is it?

       In this project, we will estimate, with 95% confidence, the actual percentage of Sierra

College students that are in substantial credit card debt of $2,000 or more.

                                            II. Methods

       In order to see if there was a problem with credit card debt among Sierra College

students, we first surveyed several Sierra College students to see how many of them were in

substantial credit card debt. We defined substantial credit card debt as having at least $2,000




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worth of credit card debt. The reason for this is that just because someone has credit card debt it

does not mean it is a problem. Someone might have $50 worth of credit card debt, which is still

debt but is not really a problem as they most likely will be able to pay it off fairly quickly. We

decided that we needed to clarify at what point credit card debt is a problem, which we decided

was $2,000 or more. This amount is what we decided was a substantial amount of credit card

debt that would most likely be a problem for a person to be able to pay off in a timely manner

before their debt got out of hand. To obtain our results, we surveyed students in three separate

classes, a Communications class, an English class, and a Business class, as well as students

walking past the cafeteria. To achieve a random sample, we used the systematic sampling

method by only surveying every fourth student in each class. This was done by simply walking

up and down each aisle and stopping to survey every fourth student. The systematic sampling

method was also applied to the students outside the cafeteria. Only every fourth student to walk

by was stopped and surveyed. In total, 39 students were surveyed. The question asked in our

survey was, “Do you have any credit card debt and if so, is it more than $2,000?” We marked

down their response of either yes or no, and also noted if they were male or female. The method

used to analyze the results was the one sample proportion confidence interval, the 1-ZPropInt

function. This method was used because it could help us predict what percentage of the actual

student body of Sierra College is in substantial credit card debt by using our random sample of

39 students. There were a few limitations in our procedure. The first is that our sample size was

fairly small and was taken from only three different classes and a few other students outside the

cafeteria. A larger sample and one drawn from several classes and at different times of the day

would have produced a better sample, but due to time constraints we were unable to achieve this.

We also made assumptions with the student’s actual level of credit card debt as we did not




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actually see their credit card statements; we were only going off of what they told us. There

might have been students who were mistaken and actually had more or less credit card debt than

they thought, but getting accurate debt levels would have been impossible for us to achieve so

we just had to take the students’ word for it.

                                             III. Results

Survey Results:

        Male Female Total

Yes       11        9        20

No        11        8        19

Total     22       17        39



Out of 39 Sierra College Students surveyed, 20 of them had substantial credit card debt of $2,000

or more. Using a 95% confidence interval, what is the actual percentage of Sierra College

students in substantial credit card debt?

1-PropZInt

35.6% < p < 70.0%

With 95% confidence, it is estimated that between 35.6% and 70.0% of Sierra College students

are in substantial credit card debt.

                                            IV. Conclusion

        Based on the results, we can estimate that anywhere from 35.6% to 70.0%, or between

1/3 and 2/3 of Sierra College students are in substantial credit card debt of $2,000 or more.

These results are alarming because this is a large number of students who already have a large

amount of credit card debt. What makes this alarming is the fact that the majority of Sierra




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College students are younger, and many only work part time or have jobs that do not pay a lot of

money. This means that it is harder for them to pay off their debt because they do not have a lot

of disposable income. So many of these students may only be making the minimum payments or

worse not making payments at all and are incurring late fees. This only adds to their debt and

when coupled with the high interest rates that young people generally are forced to pay is a

recipe for disaster. Many of these students could very easily find themselves buried under a

mountain of credit card debt before they even enter the real world. But who is to blame for all of

this? Is it the students themselves? Or is the credit card companies who keep extending them

credit even though they know the students will most likely not be able to afford to pay them off?

It is hard to ignore the flood of credit card applications that flood a person’s mail and email

boxes as soon as they turn 18. And should these credit card companies be extending such high

credit limits to people who may not even really need it? How can this alarming trend be

reversed? One option would be to limit the amount of solicitation by credit card companies to

reduce the temptation to open more and more credit cards and to place a credit limit on younger

people so that they are unable to run up credit card bills that they have no way to keep up with.

Or another solution would be to better educate young adults about the danger of excessive credit

card spending and how to be responsible with their money. In the end the best solution would be

a combination of both, responsibility on both the part of the credit card companies and on the

students.




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