Also banned: Selling of students’ personal information
I applaud the Illinois lawmakers and Governor Pat Quinn for passing legislation which bans the gimmicky marketing of credit cards to college students. The bill, which won’t take effect until January, could impose fines on colleges and universities if they allow credit card companies to offer free gifts when marketing their products on campuses.
According to State Treasurer Alexi Giannoulias, who lobbied for the new law,
“Too many students have had to learn the hard way that there is nothing free about these gifts.”
Giannoulias noted that college students can run up huge debts that, when unpaid will remain on their credit histories for years after graduation, affecting their abilities to purchase homes or vehicles.
Credit Cards and College Students
I totally agree, adding this statistic: the Jump$tart Coalition for Personal Financial Literacy reported that 19% of all bankruptcies are filed by people under age 25. “How,” I ask myself, “could people this young accumulate this much debt?” Yes, they could have huge student loans, but these can’t be bankrupted, so the logical conclusion is credit card debt. And just when did this credit card debt start? These credit card predators, errr..companies, know full well that the minimum age for owning a credit card is the same age as most incoming college freshmen: 18. They also know that many of these young adults are naive about owning a credit card, so they sink their hooks into them with an innocent give-away (Tee shirt, free pizza, etc.). And, as Mr. Giannoulias points out, “too many students learn the hard way that there is nothing free about these cards”.
The new law, House Bill 2352…
also prohibits schools from selling student’s names and personal information to credit card lenders. Did you get that? If not, read it again and let it soak in. I ask you to consider exactly what your universities have been up to. First, they have been receiving payoffs from the credit card companies to allow them to market their students. Secondly, they have been selling the student’s names and personal information to these credit card lenders. “Why” I wonder, “has this even been an issue? Shouldn’t our colleges and universities be protecting their students from vultures instead of making deals with them?” I would like to think that our colleges have a fiduciary relationship with their students, but this is obviously not the case when the price is right. And doing the right thing only when forced by legislation doesn’t improve their credibility.
The measure, which was approved by large margins in both the House and the Senate, affects both four year colleges and community colleges. Again, I applaud Treasurer Alexi Giannoulias, our Governor and our legislators for getting this one right.
One closing thought:
the bill doesn’t go far enough. How about requiring these centers of higher learning to give full disclosure to incoming students and their parents about any and all agreements they have made with credit card companies? Of course this would be nice if done voluntarily, but based on our colleges’ track records, it is not likely to happen.
Readers: Do credit card companies market students on campus where you live? What kinds of free give aways do they use? Do colleges in your state sell students’ names and personal information to credit card companies?