May 4, 2009
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News: Safeguards for Students
In the midst of escalating unemployment and rising higher education costs, students have found themselves in a difficult situation. Finding alternative methods to fund their educational needs and meet daily expenses has caused many students to rely on credit cards for survival. They have fallen prey to ongoing aggressive marketing campaigns that have placed them even further in debt. Recent statistics indicate college students account for $1.25 billion of the nation’s overall credit card debt; a number up significantly from past years. To the students’ defense, Senators Chuck Schumer (D-NY) and Chris Dodd (D-Conn) have waged a battle against the financial industry with their CC Accountability, Responsibility, and Disclosure Act which would prohibit lenders from issuing cards to individuals under the age of 21 without parental consent. It would also require these individuals take a financial literacy course prior to the lender issuing them a card. Further, the measure would ban credit card companies from participating in aggressive marketing strategies targeting individuals under the age of 21.
Senator Dodd, Chairman of Senate Committee on Banking, Housing, and Urban Affairs, authored the bill which has as already been approved by the committee, and hopes it will soon be approved in the Senate. Meanwhile recent graduates remain victims of these aggressive marketing campaigns. Many say credit card companies presented some very inviting offers at a time when they were being faced with a decision as to whether or not they should drop out of school. Several years later, they continue struggling to pay off the credit card debt they racked up trying to manage educational expenses. Most acknowledge they made poor choices, but just didn’t know where the next dollar was coming from.
Graduates are already faced with huge student loans in addition to the credit card debt which makes paying off the debt an insurmountable task. Senators Schumer (D-NY) and Senate Banking Chairman Christopher Dodd (D-CT) are determined to stop these deceptive practices with a provision in their bill which states “The Dodd Bill Ensures Adequate Safeguards for Young People.” You may view the bill in its entirety on the U.S. Senate Committee on Banking, Housing, and Urban Affairs website at http://banking.senate.gov/public/