College students may soon have the U.S. government as their ally in the battle against credit card debt.

Congresswoman Louise Slaughter (D-N.Y.), whose constituents hail from Monroe County, introduced the bipartisan College Student Credit Card Protection Act (H.R. 184) March 28.

Proposed changes

The proposed bill would limit the available credit line that a credit card company can give a student to 20 percent of his or her annual income if the student does not have a co-signer for the card. It would also require parents who co-sign to agree in writing to any and all increases in the credit limit.

The bill is seen as a way for students to protect themselves from the current onslaught of credit card solicitations that have caused many to declare themselves bankcrupt.

?What does it take for a college student to get a credit card? It turns out the credit card companies are practically giving them away ? by the lure of free T-shirts and mugs ? with little scrutiny of a student?s ability to repay their debt,? Slaughter said in a statement introducing the bill on the floor of the House of Representatives. ?As a result, a lot of college students end up taking a crash course in debt management.?

American Express is one example of a credit card company that uses enticing features such as discounts on retail items and airfare to persuade college students to sign up for their card.

American Express spokeswoman Monica Beaupre said in an article in the Democrat and Chronicle that the company does not make any comments on legislative proposals, but she added that the company does have a plan in place to help students use their cards responsibly.

Mastercard and Visa also follow similar strategies.


Slaughter told those in attendance during her introductory statement that close to one in 10 undergraduates owe more than $7,000 in credit card debt.

?The number of bankruptcies among individuals under the age of 25 have nearly quadrupled in the last five years,? Slaughter said.

A research study done by Harvard law professor and bankruptcy expert Elizabeth Warren in 1999 documented a 51 percent increase in the number of people aged 18 to 24 applying for bankruptcy since 1991.

??Credit cards are a terrible thing. We lose more students to credit card debt than to academic failure,?? Slaughter said, quoting John Simpson, a University of Indiana administrator.

Following Slaughter?s lead, New York State Senator George Maziarz (R/C-North Tonawanda) scheduled a public forum Tuesday at SUNY Brockport to discuss legislation to ban the marketing of credit cards on SUNY and CUNY campuses across the state.

?Currently, there is no statute prohibiting a state-financed institution from merchandising credit cards,? Maziarz said in a press release. ?The purpose of this legislation is to mitigate the chances of students overburdening their own resources and to remove SUNY and CUNY from partaking in the dangerous precedent of teaching students how to spend money they do not have.?

New York is among a handful of states considering legislation that would create rules governing credit card solicitation on campus.

Maziarz?s bill would not affect private universities such as UR, however. Instead these universities attempt to regulate credit card solicitors in their own ways.

Marketing on campus

UR makes all vendors who wish to set up shop in Wilson Commons fill out a vending application and standing agreement form that requires they pay a flat fee of $45 per day if they are doing what the form calls ?sign-ups? for credit cards, phone cards, etc.

The agreement also says vendors can only be on campus twice a semester for a one to three-day period beginning on a Monday or ending on a Friday.

Director of Wilson Commons and Student Activities Rob Rouzer said that UR does not receive any other monetary compensation outside of the vendor?s fee.

Rouzer does not agree with any suggested law that would treat college students differently than other adults.

?I believe the issue is not a law that targets college students and credit, but rather a need to address the banks and credit card companies and the way they allow unrealistic credit limits to the population in general,? Rouzer said.

The House subcommittee on financial institutions and consumer credit is currently reviewing Slaughter?s bill.

In May, the General Accounting Office will study the problem of student credit card debt.

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