What Type of Debt Can College Students Get Into?

College students face many temptations during their college experience. One such experience is the temptation to overspend and get deep into debt. College students can get into a variety of different debt, making it hard for them to succeed financially following college, because they graduate owing thousands of dollars. Not all debt is bad, but it is important to teach your college kids to avoid it whenever possible.

Credit Cards

Credit card debt is common amongst college students. In fact, the average undergraduate student carries more than $2,200 worth of credit card debt as of summer 2008, according to the Center for American Progress. Students who graduate with several thousand dollars of credit card debt begin their careers with a disadvantage over debt-free graduates. In addition to the monthly payments and other fees associated with credit card debt, students with a large amount of credit card debt likely have lower credit scores and will have a harder time buying a house or car.

Student Loans

Student loans are another common type of college student debt. College students who cannot afford to pay their tuition in full often apply for financial aid, which comes in the form of a loan that the student must pay back over time after graduating. Student loan debt is considered acceptable and better than credit card debt because the interest rates on student loans are typically much lower than credit card debt. For some, student loans are the only option to pay for school.

Medical Bills

Debt resulting from medical bills is another form of debt that plagues some college students. Many medical procedures are unavoidable, and students who have health insurance through their parents or through the school often have most expenses covered. However, high deductibles or situations where the medical procedure is uninsured leaves many students with thousands of dollars in medical expenses, which many have a hard time paying for with little income coming in as a student. After graduating, the medical debt might still be a problem for students. According to a 2003 Commonwealth Fund survey, about 37 percent of adult Americans struggle to pay medical bills.

Retail Credit

Retail debt is similar to credit card debt. Students fall into retail debt through retail credit cards, which are similar to regular credit cards but only allow students to use the card in certain retail stores. The cards entice students to make retail purchases they cannot otherwise afford, and then cause students to fall into debt even more through interest charges and late or missed payments fees. Excessive retail credit debt also has negative implications on a student's credit score.