[Congressional Record Volume 151, Number 27 (Wednesday, March 9, 2005)]
[Extensions of Remarks]
[Pages E397-E398]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




               COLLEGE STUDENT CREDIT CARD PROTECTION ACT

                                 ______
                                 

                     HON. LOUISE McINTOSH SLAUGHTER

                              of new york

                    in the house of representatives

                        Wednesday, March 9, 2005

  Ms. SLAUGHTER. Mr. Speaker, while we prepare to debate in the next 
few weeks a bill that will make it more difficult for personal 
bankruptcy filers to escape their debts, I rise today to speak about 
young people in this regard. We have seen a 50 percent rise in 
bankruptcy filings in the past 10 years among young people.
  I am reintroducing legislation today to address the growing problem 
of rising credit card debt among college students in the United States, 
a leading cause of bankruptcies filings among young people.
  In 2001, Nellie Mae conducted a study that found college students, on 
average are graduating with six credit cards in their wallets. In 2001, 
their credit card debt average was $2, 327, and graduating seniors had 
a combined college loan and credit debt of $20,402 each.
  Semester after semester, students open their mail boxes to find 
envelopes notifying them that they are preapproved for credit cards. 
When they check their e-mail, there are more credit card offers. When 
they answer the phone in their dorm room, there are more offers.
  Credit card companies pay college students generously to stand 
outside dining halls, dorms, and academic buildings and encourage their 
fellow students to apply for credits 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. Walk on a college campus from move-in 
day on, and getting inundated with credit card applications is 
unavoidable.
  I have heard personal stories from my district about college students 
overwhelmed by credit card debt. One junior in college has amassed a 
whopping $14,000 of credit card debt. And Victoria's Secret still gave 
her a credit card with a $2500 limit.
  One of my staffers was approved for a credit card when she was in 
college after misspelling her name on the application, giving an 
incorrect address, wrong phone number, and wrong social security 
number. Clearly, credit card companies are not paying attention to whom 
they are giving credit cards, much less if the applicants can afford to 
pay the balance. This must stop!
  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.
  Instead of endless possibilities, students are burdened with endless 
debt. Studies show that over half of college students feel burdened by 
debt when they graduate. According to the Federal Trade Commission, by 
the time college students graduate, one in eight will have charged 
their way to more than $7,000 of credit card debt. Studies also show 
that the

[[Page E398]]

likelihood of homeownership decreases as student debt increases. It is 
heartbreaking to me that young college students could jeopardize the 
possibilities of their future due to easy access to lines of credit 
that are not based on any income or creditworthiness requirements.
  Why are we making it so easy for our young people to amass such 
outrageous amounts of debt that can only lead to personal ruin?
  That is why I, along with Representative Duncan, my friend from 
Tennessee, have reintroduced the College Student Credit Card Protection 
Act. The bill will take important steps toward reducing, and 
eliminating, credit card debts to college students by requiring credit 
card companies to determine whether a student applicant has the 
financial means to payoff 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.
  Mr. Speaker, I thank you for this opportunity to address this 
critical issue facing our young people, and I urge this House to 
consider and pass this bill quickly.
  Mr. Speaker, it is time to stem this problem, because the policy 
implications of thousands of young people filing bankruptcy are dire.

                          ____________________