College Student Credit Card Protection Act

Floor Speech

COLLEGE STUDENT CREDIT CARD PROTECTION ACT -- (Extensions of Remarks - August 03, 2007)

* Ms. SLAUGHTER. Madam Speaker, today I am proud to introduce the College Student Credit Card Protection Act. This bill seeks to address a growing problem among college students in the United States: devastating credit card debt.

* Nellie Mae's Student Credit Card Usage Analysis in 2005 found that the outstanding balance for the average college student was $2,169. Final year students carried an average balance of $2,864 while freshmen carry an average balance of$1,585. Additionally, as students progress through school, credit card usage swells. Ninety-one percent of final year students have a credit card compared to 42% of freshmen. The study also found that the average American college student is graduating with more than 4 credit cards to their name.

* College freshmen are typically offered eight credit cards during their first semester. Semester after semester, students open their mail boxes to find envelopes notifying them that they are pre-approved for credit cards with a $500 limit and no annual fee. When they check their e-mail, there are more credit card offers. When they answer the phone in their dorm room, there are even more offers.

* Credit card companies pay college students generously to stand outside dining halls, dorms, and academic buildings and encourage their peers to apply for credit cards. With each completed application, the student applicant receives free gifts--from t-shirts to indoor basketball hoops--and the credit card company receives another interest-paying customer.

* I have heard horror stories from my district about college students overwhelmed by credit card debt. One third-year college student had amassed a whopping $14,000 of debt. The question that cries out for an answer is: why are we making it so easy for our young people to amass such outrageous amounts of debt?

* With interest rates climbing, fees increasing, and the number of credit card holders going up every day, credit card companies should not be allowed to expand their unfair, predatory business practices by exploiting our Nation's future. College students are often inexperienced consumers who can get sucked into unfair credit card deals or simply get in over their heads with the numerous underlying and unknown fees. Many simply sign up for a credit card without any knowledge of the interest rate, fees, and penalties that come along with their card. We must address these unfair lending practices and fees to help American college students avoid enormous financial burdens from which, as adults, they may never recover.

* College graduation should be a time of excitement and new beginnings; a time when students can watch the skills they have learned in college manifest into successful careers and happy lives. But instead of seeing endless possibilities, too many students are burdened with endless debt. Studies now show that the likelihood of homeownership decreases as student debt increases. It is heartbreaking to me to think that recent graduates could jeopardize their future because we have allowed creditors to lend them sums of money they have no hope of paying back.

* That is why I, along with Congressman DUNCAN, my friend from Tennessee, have reintroduced the College Student Credit Card Protection Act. The bill will take important steps toward reducing credit card debts to college students by requiring credit card companies to determine whether a student applicant has the financial means to pay off a credit card balance before they are approved. It would restrict the credit limit to minimum balances if the student has no independent income, and require parental approval for credit limit increases in the event that a parent cosigns the account.

* It is time for credit card companies to be responsible lenders. For the sake of our college students and their futures, it is critical that we pass legislation that prevents credit card companies from plunging young men and women into debt.

* Madam Speaker, I thank you for the opportunity to address this critical issue facing college students nation-wide, and I urge the House to consider and pass this bill quickly.

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