"The Credit Card Trap: Reflections On Why So Many Young People Are Forced Out of College Before They Ever Get Started"
by Johnie H. Scott, Assistant Professor
Pan African Studies Department - California State University, Northridge

Jerry Tolliver (fictitious name) has just started his first week of school as a freshman at CSUN. Recently-turned 18 years of age, this African American student attended junior and senior high school in the San Fernando Valley as a PWT (Permit with Transportation) student. A quiet kid in school, Jerry achieved a 2.18 GPA in high school. Although he went out for the varsity track team as a senior in the 100 and 200 meter dashes, Jerry did so more to occupy that time he normally would spend riding the bus back to South Los Angeles where he lived on 84th and Hoover Streets -- a rough neighborhood known for its vicious streetgangs and drug warfare. While he wasn't a gangbanger, the kids Jerry grew up with on that block were and this made it difficult and lonely for him at times.

Mrs. Tolliver raised Jerry and his younger brother, Ralph, all alone. Jerry's father had been killed in an auto wreck when Jerry was six years old. Mrs.Tolliver supported the family by working as a Nurse's Aide at various hospitals and health clinics in South Los Angeles -- an income supplemented from time to time with food stamps and other forms of public assistance. Her own family resides in Houston, Texas. While Jerry's grandparents on his Mom's side are both alive, they survive on Social Security payments and he has never known his father's parents. Jerry can remember going to Houston once when he was 11 years old and that was to bury his Uncle Buddy.

Jerry is the first generation of Tollivers to attend college. He came to CSUN after an EOP recruiter visited his high school to talk of the possibilities of young Black kids like himself getting a college education. Jerry followed that recruiter's visit up by going to his school counselor. Although late in his senior year, Jerry applied and was accepted to Northridge through the Educational Equity Program. EOP worked it out where he could live at the University Park Apartments with two roommates. In addition, he qualified for $2,400 in College Work-Study funds based on his mother's single-parent income. As was noted in his financial aid application, Jerry's father had not been seen by the family in over ten years and had not made any child support payments.

Jerry didn't have a car, but since he was living on campus this wasn't seen as a problem. His major concern was being able to afford the Park Apartments rental, cost of tuition and fees, books and lab expenses, and basic living expenses. Since Mr. Tolliver had been gauranteed a Pell grant, meeting the basic financial needs at CSUN didn't loom as a problem so long as he stayed within his means.

Then, things began to unravel.

Over the Labor Day weekend just prior to school starting, Mrs. Tolliver was laid off from her job at the South Los Angeles Health Center where she had been working the past two years. The layoff came as a result of a strike by workers at the Center for better pay and conditions, and followed up a cutback in federal funding for the community-based health center. To meet a tightened operating budget and the demands of the striking workers, the Center "bumped" all employees with less than two years of active employment. Jerry wanted to go to work and help out the family rather than enroll at CSUN. But a proud Mrs. Tolliver, determined that her son should go on and complete his education while becoming the first in the family to have a chance at a college education, insisted that he go to school.

What made things worse was that younger brother Ralph was not having the success Jerry did in avoiding gang peer pressure in the neighborhood. Jerry was troubled by his brother's long absences from their two-bedroom apartment.

Jerry's frustrations were heightened by the fact that whenever Ralph returned after those absences, it was with an attitude of vengefulness and lack of respect that he showed to their mother. Jerry desperately wanted to spend time with Ralph, to show his younger brother that there was a way to beat the system which was beating down so many of the young men and women around them.

They didn't have to go far to see the rock houses that had traffic flowing through day and night. The young women hustling their bodies on the streets for a "hit off the pipe." Jerry and his friends called these young women "Strawberries." Nor did Jerry and Ralph have to go very far to see 12 and 13-year olds selling drugs on the streets, often with a roll of bills in their pockets while bragging about making more money as fourth and fifth graders than their unemployed fathers and mothers; that the money these kids made from selling drugs helped buy groceries, clothes and furniture and furthermore, that the parents knew.

Mrs. Tolliver knew this as well, perhaps even better than her two sons. And it was from what she was aware of, and had seen, in the course of her 36 years on this earth that this spirited Black woman refused to let the streets devour her sons as others were being taken. While Jerry and his Mom waited for Ralph to come home and join them for the small family bar-b-que, she let her oldest son know as much.

"Jerry," she said, "I know it may not mean much to you right now but you are all that I have. If you don't make it in college, if you don't go on and graduate, then all of this that I have gone through has been a waste of time. Just look around you. I ain't telling you nothing that you don't already know. It's dangerous out here. Young kids getting shot and killed all the time. Young girls doing anything to get some drugs, spending their county checks on that crack while their kids go without food and shoes or the rent being paid. That's just the way it is."

She ended by saying, " I want you to do better than all this and you can. All you got to do is go to school and get that education. Don't worry none 'bout me and Ralph."

Outside the tiny apartment, a police helicopter could be heard whirling nearby and the sound of sirens periodically punctuated the air. Rap music blared from a ghettoblaster carried by a group of young men and girls.

Power!

Power!

Power!

Somebody line up the suckas who refuse to recognize the troop,

Tie up the punks who refuse to understand you,

My posse's growin' and it's gettin larger everyday,

Detroit
Chitown
You know L.A.

Ice T, fool, I cause havoc when I man the microphone!

Mrs. Tolliver went and looked through her clean white curtains at the kids swaggering their way down the street throwing gang signs at a passing car, and then returned.

She said, "Just you remember one thing. The same way I got that job, I can get another. And I damn sho ain't gonna let Ralph and me suffer or do without just because of some layoff. I'm planning on enrolling at Southwest College anyway to get my LVN license so's I can at least work out of the Registry and make some real money. That way me and Ralph can get out of this here neighborhood before something really bad happens. But that's something I will deal with it." Her voice then choked as she said, " The only thing you got to do is make certain I don't have any more burdens laid on my shoulders by you not going to school. Now that would hurt!"

A knock came on the door. Both looked up and Jerry went to answer it. He cracked the door opened, peered through it and quietly said, "It's Ralph, Momma."


Registration Week

Jerry couldn't help wondering if everybody could tell he was a new student as he waited in the lines outside the Matador Bookstore to get in and buy his books. He certainly felt like one as the kids in front of him talked about what they had done over the summer. Jerry had enrolled in 15 units that included an English class in Pan African Studies (He was still wondering if the English in PAS would equal that offered in the more traditional English Department), an Astronomy 150 class, Biology 100 and a Biology 100 lab, one other class in PAS 271 (Black History) and a Health Science 131 course. This first-semester freshman had decided that what he wanted to be one day was a doctor and made up his own course schedule without counselling or faculty advisement.

Jerry had also been hired as a student assistant through the Work Study Program which meant he would be working 20 hours a week -- the maximum allowable. Thinking of his mother and younger brother, this young man was looking for a second job on the side but determined not to tell anyone until he had it confirmed. The line outside the Matador began moving and soon Jerry was handing his ticket to the monitor. Once inside, his eyes widened as he noticed the long table just in front of the entrance to the bookstore.

"American Express here."

"Visa Card here."

"Mastercard here."

"Instant approval in 15 minutes for college students!"

"No prior credit history necessary. Start your credit here!"

Are they for real, Jerry thought to himself. Then he heard himself talking aloud, asking the Asian-American student next to him if this was really true.

"You bet your ass!," the student replied as he went inside and added, "I got my American Express and Mastercard right here last year!"

Mrs. Tolliver had owned only one credit card in her entire life, Jerry thought, and that was to the J.C. Penney where she took him and charged her limit to get clothes he could wear to college. Jerry inched over to the long table for a better look. In less time than it takes to tell, he had applied for American Express, Visa and Mastercard and been approved for all three. "You can expect to receive your cards in the mail within the next 1-2 weeks," the company reps all told him smilingly.

Jerry went inside the bookstore where he quickly spent $240 on textbooks and lab supplies, then went back to his apartment at the Village. Along the way, all this young man could do was think to himself just how easy it was to get instant credit approval -- something his mother and none of the parents of those kids he had grown up with had. Jerry thought to himself about the money he had just spent and how he still had to buy notepaper, files, folders and and highlighters.

"That's alright," Jerry said to no one in particular as he walked down Zelzah Avenue, "I can take care of business now. Momma won't have to worry about me calling for money."

As he headed home, the line of interested students began to lengthen in front of the "Instant Credit Approval" desk.


Discussion

Every year, hundreds of young people like Jerry Tolli- ver start off their college careers by getting instant credit approval for a slew of credit cards. In a world increasingly geared towards plastic money -- money that you never see change hands -- it is easy to understand the temptation this holds for students who really could use a little financial help on the side not covered by scholarships, grants, loans or a part-time job. The appeal is very simple -- buy now and pay later. But what students fail to realize is that the "pay later" clause in the contract is binding and carries heavy penalties when you do not make those payments on time.

This is especially true for the major credit cards -- American Express (which insists that the balance be paid in full when due!), Mastercard/Mastercharge and Visa. For the college student already living on a tight budget, these added payments soon become not the straws, but the boulders that would break any camel's back! For the reality, plain and simple, becomes how is one going to make those payments, avoid those nasty letters and phone calls from bill collectors, keep those "delinquent payment" notices off one's TRW file -- imagine a bad credit rating before you've turned 19 years old, a credit rating that will stay with you for at least seven years and affect your ability to get the things in life later on that you truly need.

It isn't simply the major credit cards that ensnare the African American student. There are the department store cards that young women love to get -- up to 10 and 15 at a time as they spend their evenings and weekends in the Mall shopping rather than at home studying. They find themselves with a closetful of clothes and their dresser tops are covered with gold necklaces, bracelets, earrings, Giorgio and Obsession. To the side, one sees a stack of unopened bills from those stores insisting on minimum payments of 25% or that the full balance be forwarded with the credit card, cut in half, enclosed.

These aree the young women with $3000-$4000 in bills and no viable means of paying. These are the students who suddenly find that they have to find another job -- one separate from the College Work-Study -- a job they can work 32-36 hours a week at, a job that pays at least $7 an hour. That salary isn't going towards their education -- it is going to the credit card agencies along with the card they've had to destroy and mail in.

These, quite simply, are the students who don't make it through. It doesn't matter that they had good grades in high school. It doesn't matter that they have the chance to do something no one in their family has ever done -- get a college degree. It doesn't matter that they want to open up their own business one day, or be an attorney, or enter medicine, or teach, or go into broadcasting or maybe go back one day and work in the community they grew up in. None of those dreams and aspirations matter because they will never materialize. These are profiles of young people in serious debt before ever making it to their 19th birthday, before ever making it out of their first year in college.

More important, these young people are not stupid by any stretch of the imagination. Perhaps they got their priorities confused while going through Nordstrom's and Bullock's, looking at and buying things they had always wanted but never dreamed they could afford before finishing college. When they took out that Mastercharge, they were told on the spot that the store would open up a charge account for them based on that "major credit card." The credit card trap. Invisible money. Plastic. Take it out of your wallet, hand it to the sales cashier, ring it up and take it out. That weekend, take your special friend to dinner and put it on your American Express. Never mind the tab, that will be faced later. All the actions one sees on All My Children, Generations, and The Young and the Restless. Except now the center of attention is you -- and for a few heady moments in the sun, you forget what made it all possible in the first place.

The fact that you are enrolled in college not to work at paying off credit cards but as a full-time student with a chance to shape your own destiny.

And then, not more than 3-4 months later, you find yourself on academic probation, working 32 hours a week to meet credit card bills, with no time for quality study that probation demands of you and no one to turn to (can Jerry ask his Mom for help?). In less than a year, from September to May, you have flushed the dream of every African American down the toilet -- you have seriously damaged your chances of ever getting a college degree in a world that now absolutely insists on people with professional credentials.


What can you do?

The very first step any student can take to insure their survival past that first year of college, in particular, is to live within his or her means. This is not difficult to understand at all, but is very hard to follow. In a world where working adults have a pinch making payments every month while raising families and developing careers, is it difficult to understand the conundrum a college student places himself/herself into unnecessarily by collecting plastic -- knowing the temptation to use it is going to rise up sooner or later?

This is where students give into an unseen form of peer pressure as they think to themselves that somehow or another they need to have a credit card in order to feel apart of the college crowd. Nothing could be more false. It is exactly this kind of magical thinking on the part of students who are new, who don't know what is involved, who've been essentially sheltered from the realities of overburdening expense(s) all of their lives that gets them very quickly into financial difficulty that few, if any, recover from without having to make major loans that would have been far better spent on their college educations.

Unfortunately, this is not one of those situations that can be wrapped up neatly at the end like a segment of A Different World. The sad truth is that before the year is out, someone you know -- perhaps even you! -- will become yet another fatality of instant credit approval.


Discussion Questions

  1. If you were Jerry's roommate, what advice would you try to give him on learning that he had gained possession of these credit cards and knowing his personal situation? Do you know someone who fell victim to this situation?
  2. What are your beliefs about credit cards and college students?
  3. According to usury laws, private citizens were forbidden from charging more than 10 percent on a loan made to another party. Usury laws were negated by a rapidly rising prime rate in the mid-1970s. Banks and businesses now charge substantially more than the10 percent rate. What is the average interest on (a) Mastercard/Mastercharge, (b) Visa and (c) American Express? If Jerry Tolliver owes VISA $1,000 in charges, how much will he owe them in 365 days if he does not make any payments?

Key Concepts

Define the following concepts/terms:

  1. Peer Pressure
  2. Instant Credit Approval
  3. Unravel
  4. TRW Credit Report
  5. Slew
  6. Delinquent Payment(s)
  7. Bankruptcy
  8. Conundrum
  9. Living within means
  10. Usury Laws


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