(EMAILWIRE.COM, September 09, 2002 ) More than two thirds of Americans who have outstanding student loans (67%) say student loans are a big enough burden to prevent them from making major purchases such as homes and cars, according to the results of a nationwide survey by the Cambridge Consumer Credit Index. Of those surveyed, 20% claim student loans are a major burden while 47% say loans pose a minor burden to spending. Of the entire American public, 18% report having outstanding student loans while 82% do not have such loans. These findings are the result of monthly nationwide telephone poll of 1000 adults conducted by ICR/International Communications Research in the past week, sponsored by The Debt Relief Clearinghouse.

"As college tuitions and the amount of money people have to borrow to finance education rises in coming years, the already high burden from student loans will continue to weigh even more heavily on consumers' ability to spend for major purchases," says Jordan Goodman, spokesperson for the Index.

The overall Index remained at 56 unchanged from August, though the composition of the Index numbers changed dramatically.

In September, the "Reality Gap" based upon the difference between the amount of debt consumers say they will pay off compared to the amount of debt they actually pay off a month later surged by 6 points to 16 percentage points from August, almost back to its record level of 17 points in July. In August, 80% planned to pay off debt, while only 64% actually did so. When the gap in the "Reality Gap" increases, it indicated the disparity of how many Americans planned to pay debt and how many in reality did pay debt. Conversely as the gap decreases, more Americans are paying down debt.

The Cambridge Consumer Credit Index is a forward looking economic indicator gauging consumer spending and debt. It is released on the fifth business day of every month to coincide with the Federal Reserve Board's G19 release of consumer credit outstanding data.

In conjunction with the Index, the Cambridge Credit Counseling Corporation is releasing its monthly survey of people who have called it for credit counseling services over the past month. Cambridge representatives ask callers for the primary reason that they found it necessary to get help with their debts now. Of the 1554, people who answered, this was the order of their responses:

1.I am frustrated with high bank rates and fees (27%)
2. My income has been reduced from a lower salary, less overtime or layoff (23%)
3. I want to improve my ability to achieve future financial goals like buying a house or saving for retirement (16%)
4. I got into too much debt by overspending (12%)
5. My lack of financial education caused me to take on too much debt (9%)
6.Large medical expenses forced me to take on huge debts (5%)
7.Other reasons (5%)
8. My recent divorce or widowhood forced me to take on large debts (3%)
For more information on the survey see www.cambridgeconsumerindex.com/camsurvey.asp
The Cambridge Consumer Credit index number is composite of these three questions:

1. In the past month, have you taken on more debt or paid off debt?

The Index reads 72 on this question, an increase of 6 points from August.

In September, 36% of Americans say they have taken on more debt, with 24% taking on a little and 12% taking on a lot more debt. Conversely, 64% of Americans have paid off debt, with 46% paying off a little and 18% paying off a lot. In August, 33% of consumers had taken on more debt while 67% had paid off debt, indicating that the number of Americans taking on debt is on the rise.

2. In the next month, do you anticipate taking on more debt or paying off debt?

The Index reads 32 on this question, a drop of eight points from August.

In September, 16% plan to take on more debt, with 4% planning to take on a lot and 12% planning to take on a little debt. Conversely, 84% plan to pay off debt, with 63% paying off a little and 21% paying off a lot. In August, 20% planned to take on debt and 80% planned to pay off debt.

3. In the next six months, do you expect to take on debt because you are thinking of making a major purchase such as a car, education, appliance, medical procedure, furniture or carpeting?

The Index reads 64 on this question, an increase of two points from August.

In September, 32% of Americans plan to take on more debt to make such purchases, with 9% taking on a lot of debt and 24% taking on a little more debt. In contrast, 68% of Americans plan to pay off debt in the next six months, with 45% expecting to pay off a little and 23% expecting to pay off a lot. In August, 31% of Americans planned to take on more debt, while 69% planned to pay off debt.

"The September Index results show that while consumers continue to have high hopes that their use of debt will decrease, in fact they are being forced to take on significantly more debt to meet their living expenses," says Jordan Goodman, spokesperson for the index.

For more information about the Cambridge Consumer Credit Index, contact Media Relations Representative Paramjit Mahli at pmahli@cambridgecredit.org or 800-804-0575, or economist Allen Grommet, who provides an economic analysis of Index results, at agrommet@cambridgecredit.org or 800-804-0575, or the Index website at www.cambridgeconsumerindex.com. Consumers wishing to find out more about Debt Relief Clearinghouse referral services should call 1-888-4DEBTHELP or visit www.debtreliefonline.com.

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Produced for the Cambridge Consumer Credit Index

Contact: Paramjit Mahli
800-804-0575
pmahli@cambridgecredit.org

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Contact Information:
Cambridge Consumer Credit Index, Inc.
Joseph Nchor
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