Schumer Fighting Student Debt

Kym Jones has had a tough time with credit card companies.

Seeking to improve a poor credit history, Jones, GS '07, signed up for a MasterCard from South Dakota-based First Premier Bank, which bills itself as an ideal choice for those seeking to improve their past credit records. The result, she said, "was a disaster." Citing a long list of hidden fees including charges to pay monthly bills online, charges to pay bills by phone, and charges to change her credit limit, Jones said, "If I had known, I would have never signed up."

She said she will graduate with "thousands" in credit card debt.

Jones is not alone. According to recently released figures from the national student loan company Nellie Mae, New York college students are carrying a total of nearly $2 billion in credit card debt. And state lawmakers are starting to take notice.

Concerned with Nellie Mae findings that one-third of college students will graduate with as much as $7,000 in credit card debt, New York Senator Charles Schumer has announced plans to introduce legislation calling for a greater regulation of credit companies marketing to undergraduates. Schumer's proposed legislation would require parental consent for student credit card applications, greater disclosure of billing schemes from credit companies, and advanced knowledge of rate hikes for consumers.

Expressing concern over perceived unfairness in cryptic billing schemes, easy access to credit for those unable to pay, and aggressive marketing practices, Schumer said, "When I sent my daughter [to college] two years ago, a card for books and emergencies was standard issue. But when credit card companies descend on campuses, that one card quickly becomes four, and five, six, even $7,000 of debt follow close behind. Credit cards are a godsend, but when there are unscrupulous practices, they have to stop."

Blake Zeff, a spokesman from Schumer's office, said the senator will begin pushing the proposed legislation through Congress when the Senate returns from its October recess, likely after the November elections. "When we get back, we will be pushing forward," Zeff said. Schumer is widely expected to defeat his challenger, Republican Howard Mills, in his bid for re-election next month.

Columbia administrators seem similarly wary of credit companies. Director of Business Services Honey Sue Fishman, who oversees Columbia's relationships with private firms providing services on campus, said, "We don't allow any solicitation of any credit cards to students." She cited past instances in which her office had responded to scattered student complaints about direct solicitation from credit card telemarketers and spammers.

The Citibank branch in Lerner Hall, in keeping with agreements with Business Services, does not offer students the opportunity to apply for credit cards--though the facility does refer students to the 111th Street branch, where applications are available.

Peter Renneé, who oversees the scheduling of College Walk and Alfred Lerner Hall, said that although student spaces are not intended for commercial use, in isolated instances, "things have been slipped in." Commercial companies can gain access to campus if they are sponsored by a student group or have a privileged relationship with Columbia--as when Renneé allotted a spot for Citibank on College Walk during the new student orientation "to let students know what's available."

Yet regardless of tight campus regulations, Columbia administrators have no means to bar the familiar credit card booths immediately outside the 116th Street gates. "What happens out on the streets," Fishman said, "I am afraid that we have no control over."

From his booth just by the subway entrance, one Citibank employee, who asked not to be identified, said that he signs up 20 to 100 students a day at different area colleges throughout September.

These Citibank employees are paid on commission and offer frisbees, T-shirts, and laundry hampers to new credit customers.

Among his other aims, Schumer seeks to mandate that credit card companies warn students about the potential dangers of credit when they provide freebees.

Citibank applications for college students contain clear sections warning about the responsibilities that come with a credit line and the company's Web site offers several sections dedicated to educating students about credit debt.

Yet despite the hefty credit burdens facing undergraduates, some Columbia students seemed skeptical about Schumer's proposed legislation--especially provisions requiring parental approval for card acceptance.

"I think it's a bad idea," said Stefan Hasselblad, CC '07. "When you turn 18, you start making your own decisions on your own. You should be smart and mature enough to handle a credit card. And if you have to learn a lesson, better to learn it while you are young."