Bill would restrict credit card offers

Emily Johns

The number of free Minnesota T-shirts and credit card offers in the mail for University students will soon be reduced if a bill in the Senate Higher Education Budget Division passes the Legislature.

The bill, written by committee Chairwoman Sandra Pappas, DFL-St. Paul, would prohibit public and private universities in the state from selling or giving student information to credit card companies.

It would also prohibit the companies from marketing to undergraduate students on campus, although the University already has a policy prohibiting it.

Dr. Ed Ehlinger, Boynton Health Service director, said marketing for credit cards outpaces the information the University can provide to educate students about responsible credit card use.

Ehlinger testified before the Senate committee Thursday, saying the bill aims to slow the students’ acquisition of credit cards and show them how to use them responsibly.

“We don’t think that students coming into college have the education to deal with the marketing,” he said.

Frank Viggiano, executive director of the Minnesota State University Student Association, said students are tempted to sign up for credit card offers on campus because companies offer free T-shirts and other bonuses such as cheap airline tickets.

He said he believes if students are forced to seek credit card companies, they will find better deals and make more responsible decisions. Often, he said, the first credit cards students are exposed to are bad offers, especially for first-year students.

“Freshmen usually take the first offer they get, and in a lot of cases it’s 20 percent interest with an annual fee. Students need to be patient and shop around,” Viggiano said.

“The bill is a first step toward recognizing that making high-cost credit too available to students is not a good thing,” he continued.

Viggiano said students paying high tuition and working low-paying jobs often need credit cards for more financial flexibility.

That added flexibility, however, makes students believe they are receiving free money, said Darryl Dahlheimer, a financial counselor with Lutheran Social Service’s financial counseling.

Dahlheimer holds biweekly appointments at Boynton Health Service on the East Bank campus to address the growing number of students in debt trouble.

Dahlheimer said the program was initiated when Lutheran Social Service realized it was counseling many 30- and 40-year-olds still paying off credit cards they received as college students.

At the same time, Dahlheimer said, the University released several studies showing a correlation between students’ debt load and their grade point averages. As the debt load increased, students’ grades dropped.

Lutheran Social Service and the University teamed up three years ago to address student debt problems before they become unmanageable.

“It was a marriage made in heaven,” Dahlheimer said.

More than 100 students have used the free service in the past three years, Ehlinger said. College is an ideal time for credit card companies to start marketing to adults looking for financial and emotional freedom from their parents.

Viggiano said college students are a safe risk for the credit card companies to take because students are upwardly mobile, and once they are in the work force they will be able to pay off their debt loads.

College students have, on average, half the debt load of their same-age counterparts who are not in school.

“After their freshman year, they’re well on their way and they’re a safe risk for the companies to take,” Viggiano said.

The bill was included as part of the Senate Higher Education Budget Division’s omnibus bill Tuesday.

Emily Johns covers politics and welcomes comments at [email protected]