State Senate has passed legislation requiring all Pennsylvania colleges and universities to provide credit information to its students
Erie, Pa. -- What if your 8-year-old daughter received a pre-approved credit card application? More than eight years ago, that happened to Mary Beth Pinto, director of The Center for Credit and Consumer Research (CCCR) at Penn State Erie. That's what prompted her interest in credit card debt, credit management and the impact it has on today's students.
"Understanding credit and credit management is critical for the future financial planning of today's youth," said Pinto, associate professor of marketing. "Members of 'generation plastic' are in danger of becoming members of 'generation debt' for relying too heavily on debt to fund their lifestyles. The goal of the CCCR is to educate young people about how to use credit properly."
The center, an applied Outreach unit of the Sam and Irene Black School of Business at Penn State Erie, launched its online credit card game, an interactive quiz designed to educate students about their credit knowledge and offer the skills necessary to use credit cards wisely. The game, which can be found at http://www.cccr.psu.edu online, is much needed in light of recent legislation requiring all colleges and universities in Pennsylvania to provide information about the use of credit.
Pinto and several colleagues have conducted research on student credit card use for nearly a decade.
According to the center, between 70 percent and 80 percent of all college students have at least one credit card and most average three. A college student's average revolving balance is $2,327 a month.
"Many students carry these credit card balances plus financial aid loans, and graduate with an average loan and credit card debt totaling nearly $20,000," Pinto added.
In 2004, in an effort to combat this reality, state Sen. Jane Earll proposed and helped pass legislation that requires all Pennsylvania colleges and universities to provide credit information to its students.
"Credit card companies are targeting young people who, by and large, have no experience managing debt, credit or any personal finances," Earll said. "By the time they recognize how deep a hole they are in, it is often too late for them to bail themselves out. Personal responsibility and accountability must be learned, and not legislated. But, at the same time, we simply cannot allow credit card companies to run roughshod over students before they really know how to handle their finances."
Senate Bill 157 requires an institution of higher education to establish a policy that regulates, including prohibiting, the marketing of credit cards on campus. When establishing this policy, the college or university may:
-- Require registration of on-campus credit card marketers;
-- Limit credit card marketers to specific pre-designated areas of campus;
-- Prohibit credit card marketers from offering gifts to a student in exchange for completing a credit card application, unless the student has been provided credit card debt education literature such as written brochures or electronic information;
-- Provide, at least quarterly, credit card debt education literature with campus bookstore purchases; and
-- Incorporate a credit card debt education presentation into orientation programming.
The center's online credit card game is designed to stimulate students' interest in credit management, encourage students to translate this knowledge into behavior and promote word-of-mouth among students about credit issues, among others.