08/03/2009 11:33 am ET Updated May 25, 2011

American Students Hit Hard By Rise On Credit Card Interest Rates

Surging credit card rates over the past few months have created a desperate situation for many college students and graduates. While the percentage of American college students and graduates in debt has remained stable in recent years, the average debt per student has risen significantly.

The College Board reports that in each year between 2000-01 and 2006-07 approximately 60 percent of bachelor degree recipients borrowed money to finance their education, but the amount borrowed rose 18 percent during the same period. The total amount of education loans -- both federal and private -- more than doubled from $41 billion in 1997-98 to $85 billion in 2007-08 due to inflated tuition costs and stagnant blue-collar wages.

A number of HuffPost readers, both students and parents, have shared their stories with us.

"This school year for me has been the worst yet," wrote Nadya Lateef, a 24-year-old senior at California State University in Long Beach. She says she had to take out several student loans and has worked part-time while taking classes full-time. Still, money has "not been anywhere near enough," she wrote. As a result, she says she must rely on her credit cards to cover even her most basic expenses.

"My credit card balances have skyrocketed. My spending is frugal yet every week I have to use my credit cards to pay for expenses. For my groceries, for my gas, for school supplies, even to pay for my own degree check report so that I can graduate," Lateef said.

A 2006 report by the American Council on Education showed that more than 12 percent of students use credit cards to pay for tuition.

Recently, Lateef says her situation became even more precarious when Citibank notified her that the interest rate on her credit card would rise to 29.99 percent. Lateef does not know how she will be able to pay her bills and she has had a hard time focusing on her studies: "The more hours I work to pay my credit card debt the more my school work suffers."

Beth Leiker from Los Angeles described how her daughter, a recent graduate who put her last semester of college on her Citibank credit card, recently received a notice warning that her interest rate would rise to 29.90 percent, despite her good credit history.

"She just graduated from college in June, got a job right away but her student loans came due and now her credit card jumped the rate to a point where she can't keep up. If she didn't live with me, she'd be going bankrupt. She has friends who can't get a job or got laid off.... They are in dire straights, each moving back in with their parents who, like me, are also facing layoffs and financial problems." Leiker has seen her own interest rate escalate to 29.90 percent on her Capital One credit card.

Jessica Pardee, a doctoral student in sociology and a visiting instructor at the University of Central Florida, says she encountered the same problem with Capital One. "I pay my bill on time, I pay in full. I pay the interest without complaint if I carry a balance. So imagine my anger when my interest rate was increased from 8.90 percent to 17.90 percent," she wrote, denouncing what she calls an "interest pillaging" from banks and credit card companies.

Banks and credit card companies continue to saturate the ad market and make sure they remain visible on campuses around the country in an effort to solicit new accounts from students.

In March 2008, the US Public Interest Research Group published a survey showing that 76 percent of students had stopped at tables to look at credit card offers during school events, often lured by free gifts. The study also found that 80 percent of students have received mail from credit card companies, some more than once a month. According to PIRG, many students signed up for a credit card without fully understanding the terms of the contract.

Are you using credit cards to make ends meet? Has a credit card company raised your interest rate after missing a single payment -- or raised your rate even though you haven't missed one? Have you been charged unexpected add-on fees?

If so, we want to hear your story too. Share it with us by emailing submissions+creditdebt@huffingtonpost.com.