Assembly member Joe Coto, 23rd Assembly District in San Jose, has introduced bill AB 262, the College Student Credit Protection Act.
“Many California public university students, of all incomes and backgrounds, are graduating into severe credit card debt,” Coto said, in a March 14 press release by the Greenlining Institute.
The bill would urge the regents of the University of California and require the trustees of the California State University and board of governors of the California Community Colleges to annually direct each campus to disclose exclusive credit card marketing arrangements with banks and financial institutions on those campuses and prohibit card companies on each campus from offering gifts to students who complete credit card applications. The bill would also urge the regents to revise the University of California Policy on the On-Campus Marketing of Credit Cards to Students as it relates to specified future contractual agreements.
Although the bill would eliminate freebies like pens, tote-bags, and Frisbees for filling out credit card applications, a look at statistics from the Student Public Interest Research Group (PIRG) may make that Frisbee a very expensive item.
According to Student PIRG, 71 percent of young adult cardholders do not pay off their balance in full each month, compared to 55 percent of all cardholders. In 2001, 83 percent of all undergraduates had one credit card; the average student carries four. College seniors graduate with an average of $3,262 in card debt.
These statistics echoed the stats found on student lender Nellie Mae, the website states more than 75 percent of college students nationwide had credit cards and more than 40 percent had at least four cards and that credit card debt increases significantly as senior college students owe nearly double that owed by freshmen students in credit card debt.
Assembly member Coto introduced the bill on Feb. 5 and has now been referred to the Commission on Higher Education for review on March 27.
“AB 262 will help to protect the students who represent the future of California’s economy,” Coto said.