Credit Cards, those magical, plastic jewels with tantalizing graphics and holograms, let students spend to their hearts content and in some cases accumulate enormous bills. Do campus leaders have a responsibility to “protect” their peers from falling into this credit trap, or is it up to individuals to manage their own personal finances? Is restricting vendors’ access to campus a solution, or is providing educational programs is the key?
     According to the 2001 national survey by the Public Interest Research Group (PIRG) (www.truthaboutcredit.org), two-thirds of the students questioned have at least one credit card. Of those students, 48 percent pay late fees. The average student credit card debt rose from $1,879 in 1998 to $2,748 in 2000, according to a survey by student-loan company Nellie Mae.
     “The general feeling is that these companies are preying on students,” says Jessica Miller, chair of Associated Students at the University of Wisconsin-Madison. “You get a lot of freshmen that don’t have experience with money management and credit cards, they think it’s free money,” says Elliot Anderson, president of the Associated Student Government at the University of Akron. “I think it’s our responsibility to protect the students because they’re here to get an education,” says Amber Johnsen, Associated Students Government president at California State University-Chico.
     Other leaders feel that managing students’ finances shouldn’t be the school’s problem, but is the individual’s responsibility. “If you want a credit card, you want a credit card—if the companies want to vend, who are we to tell them no?” says John Sheehan, president of the Student Government Association at the University of Massachusetts-Amherst. “It’s a serious matter, and you should take it as such."
     Many student groups use the credit card companies as a fund-raiser—they get money for each completed application. Students give out application to their peers, who fill out the forms believing they’re helping their clubs—failing to realize they’re hurting their credit. “The problem is that you want to help your friends,” Sheehan says. Unfortunately, after the application is filled out, “the vendors can take you for a ride,” he says. Of course, if vendors are banned from campus, students lose valuable fund-raising opportunities.
     In the student union at UM-Amherst, a long concourse houses vendors who have table space on each side. “We have certain committees that decide who’s allocated what space and when they can vend—it’s important to have structure and rules,” Sheehan says. “When you’re unorganized, that’s when you get the complaints.”
     Finding alternative funding for campus groups is a primary goal at many schools. At the University of Kansas, the Student Government is looking into developing a task force to curve the amount of students gradating in debt. “Our biggest obstacle when deciding to pass legislation is that some groups will lose funding, but in the long run it’s best for the students,” says Justin Mills, student body president. “We would like to see some of the groups who do use the credit card vendors for fund raising use some of their profits to start educational forums on campus, we want to find more creative ways to raise money.”
     Fraternities and sororities at the University of Virginia also use the vendors for fund raising, which raises the issue of whether students feel pressured to apply because their friends are the ones handing out the applications. “Although this may be a problem, I don’t think it’s that big because the groups don’t pressure you into signing up,” says Adam Swann, executive vice president of Student Council. “We don’t have a big problem on grounds because the university doesn’t allow outside firms on campus, and if they’re allowed on they must go through an extensive process beforehand.”
     According to the PIRG survey, 58 percent of the questioned students said they saw on-campus credit card marketing tables for a total of two or more days within the first month of the semester. Students often flock to these tables in search of free goodies. Georgia Institute of Technology found a solution in 1997 to the table issue when SG restricted vendors from giving out merchandise to entice students to fill out forms. Therefore, if a table offered T-shirts, a student could walk up and take one without signing anything. “Anyone can take what they have, and the vendors can’t say a thing,” says Chris Kavanaugh, Tech’s student body president. “Since the restriction was made, the traffic of vendors has been cut down tremendously.”
     At the University of Wisconsin-Madison, “The companies also buy name lists,” Miller says. “Getting off these mailing lists is a consumer right, the problem is that the process to get off the lists involves an archaic form.” According to Miller, the form is hard to locate and takes time to process. “We’ve tabled to let students know about the form, and that has been fairly successful,” Miller says. Unfortunately, when students finally get their names off the lists sold by the university, they also get removed from the university directory. “It’s as if the students don’t even exist when this happens, and this just creates a bigger hassle for them.” The school is currently working on a plan so students don’t get removed from both lists.
     Student leaders at California State University-Chico succeeded in banning credit card solicitation from their campus entirely. “Two years ago, in 1999, the issue was brought up that students were graduating in debt, and credit cards companies were being blamed,” Johnsen says. The California State Student Association (CSSA) passed legislation requesting schools restrict credit card vendors from marketing credit cards on campus. A CSU-Chico the Bell Memorial Union Committee passed the restriction, and it was then sent to the Associated Students Business Committee. “We were the first school in California to implement the restriction passed by CSSA.” The student union at CSU-Chico used to be a hot spot for vendors to approach students, but since the resolution passed, vendors aren’t allowed in the building. “I could think of much more valuable people we could have taking up space in our union,” Johnsen says. Included in CSU-Chico’s resolution was a point to stop the distribution of marketing material in bookstore bags, since every student who needed books was subject to the advertising.
     In addition to credit card marketing restrictions, SG and university administrations are starting educational programs about the problems students can have if they misuse their charge cards.
     “Debt is something you don’t worry about until it happens,” says Steve Van Ess, director of the office of student financial services at the University of Wisconsin-Madison. UW-Madison started money-management programs, but the response was poor. Van Ess says, “Attendance has been dismal. We’ve set up a sub-staff at the financial aid office for the purpose of training professionals about how to talk with students and parents about borrowing.” The school also offers information sessions at summer orientation where freshmen can meet with counselors and talk about money management. “We’ve also been invited to residence halls to provide information to the students,” Van Ess says. In addition, the waiting room at the financial aid office features posters and pamphlets that describe the differences between loans and credit cards and which costs more in the long run. “The main goal is to educate people to the concept of borrowing, if you have to borrow money, get a student loan before getting a credit card.”
     “Last year, we passed a resolution in the Senate, it was an educational initiative that would provide money-management education for students,” says Eddie Pauline, SG president at Ohio State University. “The resolution passed unanimously because a lot of senators said they were in debt.” SG plans to implement the education resolution this fall. “Our vice president, Melissa Koch came up with the idea to go to the MBA program, or finance majors and develop a student-to-student program,” Pauline says. SG felt students would feel more comfortable talking to their peers.
     Even the credit card companies are stepping up to the plate and starting to work with campus leaders to try and reverse the growing number of students with debt.
     MasterCard ‘s “Money Talks” brochure helps parents talk to their soon-to-be collegians about how to use a credit card. The brochure stresses the differences between ATM cards, debit cards, and credit cards. It also describes credit history and provides students a budgeting worksheet. Started in 1998, the program was developed by the College Parents of America (CPA) in partnership with MasterCard International.
     “Are you Credit Wise?” also started by MasterCard, kicked off its second year as student leaders implement the program on their campuses. “We saw a special appeal of the peer-to-peer approach,” says Catherine Cummings, vice president, public affairs. Trained by MasterCard to become peer educators, the student interns hold workshops and informal financial presentations throughout the semester. “We provide all the printed material they need for the programs. We’re in constant contact with our interns to provide guidance,” Cummings says. The leaders coordinate with professors, deans, orientation directors, resident advisors, and campus organizations to identify additional opportunities for financial education.
     Discover also offers a booklet to students, which is distributed at campus seminars, through direct mail, and during campus events. “This booklet was made to educate students on the importance of building your credit history as well as how to manage it well,” says Kevin Vondrak, a unit manager in student acquisitions. You also can download a copy of “How Credit Cards Work,” from the Discover web site. It covers topics such as credit vocabulary and basic rules for using your card. Tips include paying your bills on time and keeping a file of all account numbers. Above all, if you are in debt, don’t be afraid to get help. To learn more, go to www2.discovercard.com/student/credit.html.
     Citibank developed a unique question-answer service for people with credit dilemmas. Anita Future, a comic strip character with a financially unstable friend is the voice behind the new “Ask Anita” e-mail program, says Gina Doynow, vice president, director of college marketing at Citi Card. Direct your questions to anita.future@citibank.com.
     The Credit-Ed program by Citibank helps college students become financial stable. The web site, www.credit-ed.citibank.com, offers an introductory course to money management. Learning to use credit to your advantage and gaining financial control are discussed on the site. 

Contact:
Adam Swann at ags9m@virginia.edu
Amber Johnsen at aspresident@csuchico.edu
Chris Kavanaugh at president@sga.gatech.edu
Eddie Pauline at pauline.2@osu.edu
Elliot Anderson at era@uakron.edu
Jessica Miller at jlmiller2@students.wisc.edu
John Sheehan at http://sga.stuaf.umass.edu
Justin Mills at jmills@ku.edu
Steve Van Ess at Steve.VanEss@finaid.wisc.edu
www.credit-ed.citibank.com
www.discovercard.com
www.nelliemae.com
Catherine Cummings at catherine_cummings@mastercard.com
Kevin Vondrak at Kevinvondrak@discoverfinancial.com 

How Do Students Use Credit?      After surveying 460 students in 2000-2001, PIRG found that... • One-third of the students applied for a credit card at an on-campus table. Of these, 80 percent cite free gifts as a reason for applying. • 50 percent of students obtained their card through mail, 15 percent at on-campus tables, and 10 percent over the phone. • 50 percent of students with cards always pay their balance in full, 36 percent sometimes do, and 14 percent never do. • 48 percent of students with one or more cards pay late fees, and 7 percent had a card cancelled due to missed or late payments. • Only 19 percent of students are sure that their school has resources on the responsible use of credit.

Resources for Students (HELP I’m In DEBT!)      What? You mean you already have too many credit cards, and the debt is unbearable! Here’s some helpful information to get you back on the road to good credit. • Be sure to check your credit report once a year for errors. You can get your report by visiting the companies’ web sites, or calling any of the following bureaus: Equifax at 1-800-685-1111, Experian at 1-888-397-3742, or TransUnion at 1-800-888-4213. Review your payment history, and if you find any errors, call your creditor to adjust the information. Also, be sure to watch for credit fraud, you can check recent charge activity and report unauthorized card use. • Remember each time you apply for a credit card or loan, the creditor places an inquiry on your credit report. Too many inquires is looked upon negatively by creditors. Keep applications to a minimum, and use your card only when necessary. (Note: Pizza doesn’t constitute an emergency.) • For more information about credit cards and money management, visit www.truthaboutcredit.org.

Useful Links and Information • www.studentcredit.com Find useful information about credit terms and apply for student cards. • www.bankrate.com Look here for tons of info about ATM and credit cards, loans, and checking accounts. • http://credit-cards-for-students.com This site offers advice on ordering your credit report, recommends credit cards for students, and answers all your credit questions. • www.collegeparents.org A great place to find tips for parents on how to talk to their children about credit. Offers links to related companies and financial advice.

Copyright © 2002 Oxendine Publishing, Inc. All rights reserved

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