CREDIT CARDS IN COLLEGE
With the continuing downturn in the Ohio economy financial issues continue to be at the forefront of legislative work. This week the Ohio House of Representatives passed House Bill 12, sponsored by Rep. Matt Lundy (D-Elyria). House Bill 12 will restrict the ability of Ohio colleges and universities to sell student data to credit card companies and ban the marketing of credit cards to undergraduate students on campus. While much of the recent economic news has focused on home mortgage debt, many individuals will tell you that credit card debt is also a crippling financial problem that affects millions of people, including those who rent their home and those who have excellent jobs.
The problem that House Bill 12 addresses is simple. Ohio colleges and universities have signed agreements, frequently involving their alumni associations, with credit card companies to allow the credit card marketers access to student contact information. The information sold includes direct campus telephone numbers and mailing addresses. House Bill 12 will stop this practice.
Credit card debt is a huge problem in the United States. Ironically, the 2007 Federal Reserve Survey of Consumer Finances collected data that shows that college graduates are more likely to have credit card debt than those with, or without, a high school diploma. When individuals with credit card debt from each of these groups are compared it is the college graduate that carries the heaviest average debt load. Certainly it would make sense that college graduates have more access to credit through a credit card company, and that increased access will lead to greater loads of debt. However, this also seems to indicate that college graduates also do not have, as a group, a better financial education or understanding of how they can live in a debt free fashion. This is in spite of the fact that they generally enjoy an income that is greater than either the high school graduate or those who did not complete high school. In order to help with this lack of financial savvy House Bill 12 will require that colleges and universities offer a financial literacy course as part of their new student orientation class or during the first grading period for the new students.
While a college or university may not sell a student mailing address or phone number to a credit card company, a student still retains the ability to receive a credit card application mailed to their campus address. This legislation is not aimed at limiting access to students who are seeking credit, but at stopping companies from pushing easy credit on students who are unaware or unready to take on the responsibility that comes with a credit card. Banks and credit unions that might operate on a college campus also would still be able to market their products to students within their place of business.
Credit card debt remains a huge problem in Ohio. Many individuals will tell you that one of the hardest things to do is to pay off a credit card due to high interest rates and the ease with which new debt can be taken on. Regulating credit card marketing on college campuses will not fix the problem on its own, but it is a solid step forward in the battle to better education Ohioans, especially our youth, on the financial dangers of easy credit.
As always, I welcome your questions, comments and input on state government issues. Please feel free to contact me by mail (State Representative Jay Hottinger, 71st House District, 77 South High Street, Columbus, Ohio 43215), by email (district71@ohr.state.oh.us) or by phone (614-466-1482).
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