Daily Egyptian Sp03
Spring 2003
Students risk bad credit
Valerie N. Donnals
Daily EgyptianThe weather has turned warm once again, and that means the return of birds, flowers and on-campus credit card solicitors.
The Undergraduate Student Government will address the issue of credit-card solicitors and the dangers of debt for college students at its meeting Wednesday at 6:30 p.m..
A resolution written by senator Eric Wiatr states, "SIUC is an educational institution and not a market place, and credit-card solicitation does not belong in an educational atmosphere."
Each year, mailboxes are stuffed with credit card applications, and students are plagued by tables set up around campus offering free T-shirts, phone cards, Frisbees and other miscellaneous items for just 15 minutes of their time.
The 15 minutes it takes to fill out one of the credit card applications can lead to thousands of dollars of debt and bad credit that can haunt students' credit records.
Jay Carter, a financial service representative from Union Planters Bank, said they are forced to turn down several students every semester for loans. He said their fiscal delinquency and failure to pay their creditors can prevent them from being able to receive a loan for a car or house.
Credit card companies use aggressive solicitation to convince students to sign up for their cards. Students who are not used to debt management often find themselves in over their head with their new fiscal responsibilities.
Late payments, charging over their limit, and multiple accounts that are never canceled can result in bad credit. The resolution said that psychological problems like stress and anxiety can result from high debt.
A study conducted by Georgetown University sociologist Robert Manning concluded that students are often forced to cut back on course work or drop out of school completely in order to find jobs to pay off their debts.
A Nellie Mae Research Foundation study said that 78 percent of students nationally own an average of three credit cards with an average total debt of $2,700.
The resolution by USG called on the University to work to protect students. It asks for the administration to prevent on-campus mailings and eliminate policies of contracting out any undergraduate student's information to private for-profit financial lending companies
There is nothing preventing the University from releasing student information, and the resolution stated that the SIU Alumni Association has contracted out information in the past.
Illinois is one of more than 20 states that have passed or are considering legislation prohibiting or regulating credit card solicitation on college campuses.
Two bills have been introduced in the Illinois House of Representatives concerning this issue.
House Bill 540 was introduced by Rep. Bill Mitchell, R-Forsyth, Jan. 30 and prohibits a university or community college from selling a student's name, address or phone number to a business organization or financial institution that issues credit or debit cards.
It was referred to the Rules Committee on March 13 who will review it before the bill returns to the House floor for a vote. Once it is passed in the legislature, it will become effective immediately.
House bill 3479 was filed by Rep. Robert Flider, D-Decatur, on Feb. 28 and is similar to House Bill 540. However, it includes students' social security numbers, email addresses, and other personal identifying information in the list of material universities are prohibited to release to financial institutions.
It has been placed on the House calendar for a second reading and a short debate. If passed, it will become effective on July 1.
USG's resolution, if passed, will give the senate's support to the two bills. It also asks that the executive committee communicate and execute the policy with all of the appropriate administrative positions on campus.
Mike Lantrip, accounting manager for the SIU Credit Union, said that he thinks it is a good idea for students to have a credit card for emergencies and to build up a positive credit history, but they need to be used responsibly.
"Students will come in wanting a loan for a car or a house, things that will last them long after college, and they already have black marks on their history," Lantrip said. "Their rates will be much higher, and that is if they even receive a loan."
Reporter Valerie N. Donnals can be reached at vdonnals@dailyegyptian.com
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Last update: Tuesday, March 18, 2003 at 10:10:40 PM
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