[Congressional Record (Bound Edition), Volume 153 (2007), Part 16]
[Extensions of Remarks]
[Page 22970]
[From the U.S. Government Publishing Office, www.gpo.gov]




               COLLEGE STUDENT CREDIT CARD PROTECTION ACT

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                     HON. LOUISE McINTOSH SLAUGHTER

                              of new york

                    in the house of representatives

                        Thursday, August 2, 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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