[Congressional Record Volume 155, Number 2 (Wednesday, January 7, 2009)]
[Senate]
[Pages S174-S175]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. KOHL (for himself and Mr. Durbin):
  S. 165. A bill to amend the Truth in Lending Act, to prevent credit 
card issuers from taking unfair advantage of college students and their 
parents, and for other purposes; to the Committee on Banking, Housing, 
and Urban Affairs.
  Mr. KOHL. Mr. President, I rise today to introduce the Student Credit 
Card Protection Act of 2009 with my colleague Senator Durbin. This 
legislation will help prevent college students from compiling massive 
credit card debt while in school.
  College students have become the target of credit card companies 
advertising campaigns over the past 15 years. Many universities allow 
credit card companies to set up tables on campus and offer students 
free gifts in exchange for filling out a credit card

[[Page S175]]

application. Additionally, students receive card solicitations through 
mail to their on-campus mailbox or at their home address even before 
they arrive at the university in the fall. These aggressive marketing 
strategies have worked and now close to 96 percent of college graduates 
hold a credit card, compared to 1994, when only half had one. The 
average college student graduates with close to $3,000 in credit card 
debt, double the amount in 1994. In some very extreme cases, students 
are leaving school with multiple credit cards and debts amounting 
upwards of $10,000.
  Credit card debt can make it harder for graduates to rent an 
apartment, receive a car loan, or obtain a job after college. Due to 
the lack of financial education and complicated terms and conditions, 
many students find themselves in over their heads. The Student Credit 
Card Protection Act will help students avoid large credit card debt 
while forcing issuers to make more responsible loans. The bill requires 
credit card issuers to verify annual income of a full-time student and 
then extends a line of credit based on the income. For a student 
without a verifiable income, a parent, legal guardian or spouse must 
cosign the credit card and approve any increase in the credit limit. 
These simple underwriting requirements will make it more difficult for 
credit card companies to approve loans that are beyond a students' 
ability to repay and return to a more responsible lending policy.
  It is imperative that we help minimize the amount of debt young 
consumers incur before entering into the workforce. On average, a 
student with a bachelors degree will leave school with $18,000 in 
student loan debt. Paying for housing, health-care and student loans 
already place a financial strain on a recent college graduate. A huge 
credit card payment on top of all of the other bills can lead to 
financial ruin before young people even have a chance to get on their 
feet. This bill gives students the protection they deserve from 
irresponsible lending that can trap them in years of crushing debt 
repayment.
  The current economic situation has exposed many bad habits of both 
the financial industry and the average consumer. The savings rate of 
our country has significantly declined over the past decade as consumer 
spending and borrowing steadily increased. While it is necessary for 
Congress to implement policies which will allow Americans to save more 
of their income, it is equally important for consumers to put into 
practice controlled and prudent spending habits.

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