Credit card debt is one of the leading forms of debt in this country. For many people, that debt starts in college, with student credit cards.
According to CBS’s “Evening News”, 10 percent of college students owe more than $7,000 in credit card debt. Many of these students acquire credit cards when they are solicited on campus or through the mail by the credit card companies.
“I, for one, would not be happy about The University selling my name to credit card companies,” said Ken Hill, 28, a technical writing major at The U of M. “Then again, that is how I got my first credit card.”
A joint bill before Tennessee’s General Assembly would place restrictions on institutions regarding the credit card solicitation of students.
The proposal would make it unlawful for credit card issuers or issuers of credit to solicit or provide promotional incentives to students at state institutions after July 1, 2002.
The bill, sponsored by Sen. John Ford and Rep. Lois DeBerry, would also prohibit public institutions of higher education from selling or distributing student lists to credit card issuers.
In addition, the bill would prohibit credit card issuers from attempting to secure such lists.
The U of M currently receives 2 cents for every name and all the information that comes with the name, which is released to credit companies.
The information provided to the credit companies by The University is the same information contained in the university directory.
Students can prohibit The University from releasing information to credit agencies by filling out a form in the registrar’s office, but doing so would bar The U of M from releasing information to anyone else, including future employers.
Chris Bell, a 19-year-old freshman and political science major, doesn’t mind his name being released to credit card companies, at least under certain conditions.
“If you know up front that when you enroll, The University can sell your name, that’s fine. The University needs to generate revenue.
Tennessee doesn’t have a state income tax, so The University has to find some way to raise funds,” Bell said. “I can say no to a credit card. I would rather The U of M do this than raise my tuition by 15 percent a year.”
The bill would bar institutions from seeking federal or state revenue to offset potential losses. Schools will be charged for increased state expenditures incurred because of the proposed change in legislation.
According to the bill, any increase in state expendintures resulting from the implementation of this act will be funded from revenues coming from credit card issuers.
Hill is not alone. Many people receive their first credit cards in college, and very few receive instruction in personal finance.
Only three states require classes in personal finance: Florida, Rhode Island and Illinois.
State Senator Steve Cohen is exploring the possibility of establishing such classes in Tennessee.
“Its a good thing for young people to learn to live within their means,” Cohen said. “Seventy percent of people live paycheck to paycheck. I’ll be thinking about this class, with planning and sacrifice, you could live with no debt.”
