[Congressional Record (Bound Edition), Volume 147 (2001), Part 4]
[House]
[Pages 4844-4845]
[From the U.S. Government Publishing Office, www.gpo.gov]



               COLLEGE STUDENT CREDIT CARD PROTECTION ACT

  The SPEAKER pro tempore (Mr. Crenshaw). Under a previous order of the 
House, the gentlewoman from New York (Ms. Slaughter) is recognized for 
5 minutes.
  Ms. SLAUGHTER. Mr. Speaker, I appreciate this opportunity to speak on 
a growing problem, the credit card debt among our college students.
  Along with the gentleman from Tennessee (Mr. Duncan), I have 
introduced a bipartisan College Student Credit Card Protection Act. 
This legislation requires credit card companies to determine whether a 
student applicant can afford to pay off a credit card balance before 
approving the application. It looks into the amount of money the 
student will be making and limits the credit to a percentage of that 
amount.
  In the event that parents are obliged to pay off the credit card 
debt, no increase on the amount of credit card debt can be approved 
without the parents' consent.
  Now, what does it take for a college student to get a credit card? 
Well, it turns out the credit card companies are just itching to give 
them away by the lure of free T-shirts and mugs with little scrutiny of 
the student's ability to pay their debts. As a result, a lot of college 
students end up taking a crash course in debt management.
  Credit card issuers are raining down solicitations on college 
students and households. Mr. Speaker, in just 1 month, just 1 month, 
the six members of my staff were sent this many credit card 
solicitations that will fill this laundry basket. Let me repeat, this 
is just 1 month for six staff members of the House of Representatives.
  Now, sadly, one of my constituents wrote to me that her stepson had 
to file for bankruptcy at the age of 21 because he was $30,000 in debt; 
and she spoke to the bank officer, and the bank officer told my 
constituent that her own college-age daughter was in the same 
situation, but her parents were trying to help her out of the mess to 
avoid hurting her credit rating and thus her future financial 
opportunities.
  The gentleman from Tennessee (Mr. Duncan) told us about the 3-year-
old in my district who got a platinum credit card for $5,000. We also 
even had a cat named Bud who also lives in Rochester where they really 
seem to be easy to get, and that cat got a preapproved card.
  Now, what about the students whose parents cannot bail them out? 
Unfortunately, that is not uncommon. The number of bankruptcies among 
individuals under the age of 25 had nearly quadrupled in the past 5 
years.
  John Simpson, an Indiana University administrator, said, ``Credit 
cards are a terrible thing. We lose more students to credit card debt 
than to academic failure.''
  ``60 Minutes,'' too, recently reported that, in 1999, a record 
100,000 persons under the age of 25 filed for bankruptcy. Nellie Mae, 
the Nation's largest student loan agency recently found that student 
credit card debt rose to a national average of more than $2,700, up 
from an average of under $1,900 in 1998, a nearly $1,000 increase.
  In addition, nearly one in every 10 undergraduates has credit card 
debt greater than $7,000. This is an even bigger problem if one 
calculates the

[[Page 4845]]

amount of time it will take the young borrower to pay off this debt.
  A student using a card with an 18 percent annual percentage rate who 
makes a minimum monthly payment of $75 will be paying off that credit 
card balance of $2,700 over 15 years, paying as much interest on the 
balance as he or she originally borrowed.
  The Daily Texan, a newspaper of the University of Texas, recently 
reported that the university's legal services office sees students who 
are struggling with debt at the rate of one every 2 weeks.
  The university counselor said ``the highest voluntary credit debt I 
have seen was $45,000. Most students who come in with major problems 
are the ones whose debts range from $8,000 to $15,000.'' That is the 
common range of debt for a college student in Texas.
  In addition, the nonprofit Consumer Education Center in Austin, 
Texas, helps about a half dozen students every week to try to deal with 
credit problems. But let me be clear, the problem is certainly not 
specific to Texas. As I pointed out, in Indiana, more students leave 
college because of debt than because of academics. This is the story on 
every college campus.
  Leslie Starkey, the niece of one of my staffers, was a young 
successful advertising executive in New York City, but she had been 
burdened by thousands of dollars of credit card debt since college. It 
was not very long after Leslie had pulled herself out of this crushing 
debt with the help of a credit card counselor that she was killed in a 
tragic fall. She was 28 years old and had lived only a short time with 
the joy of being debt free.
  We owe it to Leslie and other young people who have committed suicide 
because they could not meet their credit card debt obligations to enact 
this legislation so that they will not be spending what is the best 
time of their lives under the burden of enormous credit card debt.
  Mr. Speaker, I regret to say that the bankruptcy laws that recently 
passed this House will do nothing to help these young people.

                          ____________________