Post by title1parent on May 18, 2009 5:19:47 GMT -5
www.dailyherald.com/story/?id=294276&src=
Keeping credit in check for students
Daily Herald 5/18/2009
It's graduation season for high school seniors. Soon many of them will be heading off to college, armed with new laptops, new books, a new place to live and, for an increasing number, a new credit card.
And if they don't have that plastic before they reach their school of choice, it's likely they will be inundated with offers to sign up after they move in.
Those offers, though, are not what they seem. And that's why the Illinois Senate on Friday joined the Illinois House in passing a new bill that limits what credit card companies can offer when marketing to students. It now goes to Gov. Pat Quinn for his signature. We think it makes sense and urge him to do so.
The Credit Card Marketing Act would prohibit credit card issuers from giving away food, merchandise and coupons when marketing on Illinois campuses. Too often, the lure of those giveaways end up with those students mired in debt before they ever get out into the "real world."
"Unfortunately, (credit card companies) don't try to hook students with good deals," said Kati Phillips, spokeswoman for Illinois state Treasurer Alexi Giannoulias, quoted in the Daily Illini at the University of Illinois, "They are more likely to try to trick you, by giving you a free pizza or sandwich and not telling you that your interest rates might go up at any time."
Nationally, Congress also is working to protect college students. According to a story last week by Bloomberg News, the Senate is scheduled to vote on a bill that would prevent credit-card companies from targeting college students by requiring parental consent for a borrower under age 21 unless there is proof of independent income or completion of a financial literacy course. It also limits interest rates and fees.
Why is this important? According to a study by SLM, a provider of educational loans also know as Sallie Mae, graduating college seniors had an average credit card debt of $4,138 in 2008. That's up almost 45 percent from the average in 2004. The average debt for a freshmen has increased 27 percent.
"Credit cards should be a leg-up for college students, not a leg-trap that snares them in unbearable debt," said Sen. Charles Schumer, a New York Democrat.
This is not to suggest college students don't bear some responsibility. They need to use credit cards sparingly while in school, especially when their income is so limited.
"You should live like a student while you're in school so you don't have to live like a student after you graduate," said Mark Kantrowitz, publisher of FinAid.org, a college funding information Web site, who was quoted by Bloomberg.
That's good advice. But we think credit card companies also need to be reined in when dealing with students and so we support both the federal and state proposals.
Keeping credit in check for students
Daily Herald 5/18/2009
It's graduation season for high school seniors. Soon many of them will be heading off to college, armed with new laptops, new books, a new place to live and, for an increasing number, a new credit card.
And if they don't have that plastic before they reach their school of choice, it's likely they will be inundated with offers to sign up after they move in.
Those offers, though, are not what they seem. And that's why the Illinois Senate on Friday joined the Illinois House in passing a new bill that limits what credit card companies can offer when marketing to students. It now goes to Gov. Pat Quinn for his signature. We think it makes sense and urge him to do so.
The Credit Card Marketing Act would prohibit credit card issuers from giving away food, merchandise and coupons when marketing on Illinois campuses. Too often, the lure of those giveaways end up with those students mired in debt before they ever get out into the "real world."
"Unfortunately, (credit card companies) don't try to hook students with good deals," said Kati Phillips, spokeswoman for Illinois state Treasurer Alexi Giannoulias, quoted in the Daily Illini at the University of Illinois, "They are more likely to try to trick you, by giving you a free pizza or sandwich and not telling you that your interest rates might go up at any time."
Nationally, Congress also is working to protect college students. According to a story last week by Bloomberg News, the Senate is scheduled to vote on a bill that would prevent credit-card companies from targeting college students by requiring parental consent for a borrower under age 21 unless there is proof of independent income or completion of a financial literacy course. It also limits interest rates and fees.
Why is this important? According to a study by SLM, a provider of educational loans also know as Sallie Mae, graduating college seniors had an average credit card debt of $4,138 in 2008. That's up almost 45 percent from the average in 2004. The average debt for a freshmen has increased 27 percent.
"Credit cards should be a leg-up for college students, not a leg-trap that snares them in unbearable debt," said Sen. Charles Schumer, a New York Democrat.
This is not to suggest college students don't bear some responsibility. They need to use credit cards sparingly while in school, especially when their income is so limited.
"You should live like a student while you're in school so you don't have to live like a student after you graduate," said Mark Kantrowitz, publisher of FinAid.org, a college funding information Web site, who was quoted by Bloomberg.
That's good advice. But we think credit card companies also need to be reined in when dealing with students and so we support both the federal and state proposals.