College students everywhere are facing mountains of overwhelming credit card debt and it’s been shown that deceptive practices luring them in play a role.
For this reason, the State University of New York (SUNY) system decided Tuesday to adopt a new card reform that was created by New York Attorney General Andrew Cuomo and will help to protect its students from these deceitful practices.
The SUNY system has 64 campuses and is considered one of the largest state college systems in the U.S., which could make the impact of the reform quite large on the industry. Cuomo developed the reforms after a state investigation showed that there were signs of troubling practices when it came to credit card marketing on campuses across the state.
He has stated that these students are facing credit card debt that may last them many years and are being targeted on their school campus. The reforms could help change the future for many college students.
The new reforms will prevent SUNY from giving out any personal information to a credit card company without a student’s prior authorization. But it will not stop there. A new program will be developed that will teach the student all about how to manage financial products. The financial literacy program will help a student to understand credit cards, student loans, and other credit they may build.
Cuomo is asking that all colleges in the state adopt the new reforms and help turn the tide for these students who may be drowning in debt before they graduate.
There are some restrictions when it comes to the schools as well. For example the schools can no longer take in a portion of the finance charge that an issuer places on the student’s card. Schools have to be actively informed of all marketing and offers on campus. The issuers can no longer market at will. It must be during a time and place deemed appropriate. Sometimes schools decide to partner up with specific cards. They must now do so based on the interests of the students.
College students are battling debt before graduation. A 2009 survey showed that 84% of undergrads had a credit card and the typical graduate already owed $4,100 to credit card companies. According to Cuomo this has caused dropout rates to rise as students sought full time jobs to pay debt. The credit problems can also hurt a student’s job prospects. Many employers are checking credit for new hires now. So along with school problems and debt problems it can hinder a student’s future and credit rating.
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