State PIRGs' Higher Education Project
218 D Street SE
Washington, DC 20003
(202) 546-9707

Ivan Frishberg

Ellynne Bannon


For Immediate Release:
September 5, 2002
Ed Mierzwinski or
Ellynne Bannon, (202) 546-9707

Hearing Shows Credit Card Industry Continues Aggressive Marketing Of Overpriced Credit Cards To Students, Exacerbating Their Student Loan Debt Problems

Letter to Congress

Testimony at a Senate Banking Committee hearing today on aggressive credit card industry marketing to college students confirms the findings of reports by the state PIRGs that many college students, already at risk from massive student loan debts, have their problems worsened by deceptive credit card offers.

Recent PIRG surveys of campus credit card marketing have documented that students who apply for cards at campus tables, in return for candy, trinkets or T-shirts, have more cards, higher balances, and worse over-the-limit and delinquency problems than other students.

"Too often debt burden becomes a ball and chain for student borrowers after graduation. Many student borrowers are taking on unmanageable levels of debt to finance a college education." said Ellynne Bannon, the State PIRGs' Higher Education Advocate. Bannon co-authored a March 2002 report on rising student loan debts, based on an analysis of Department of Education data. That study, "The Burden of Borrowing," found the following:

• Thirty-nine percent (39%) of student borrowers now graduate with unmanageable levels of debt, meaning that their monthly payments are more than 8% of their monthly incomes. In 2000, the average student loan debt for the 64% of full-time student with debt graduating from a four-year school was $16,928.

• Forty-one percent (41%) of all graduating seniors carried credit card averaging $3,071. More of those students (48%) with student loans had credit card debts, which averaged $3,176.

"Colleges need to take aggressive action to police the credit card industry, which has been under intensive regulatory and legal scrutiny for its marketing practices in general, but wants to pitch cards indiscriminately to students who may not have jobs or ability to repay and who may already have serious student loan debt problems," said state PIRG consumer program director Ed Mierzwinski. "Yet, even though the Congress has moved swiftly to take up the credit card industry's draconian bankruptcy bill, it has taken no action to rein in unfair credit card marketing practices."

The state PIRGs urged Congress to do the following to stop unfair credit card practices:

• Pass the Dodd legislation, S. 891, to require credit card companies to require that credit card companies either require the same terms of college students they require of everyone else-either ability to repay a card or a co-signer - or, at least, proof that the student has passed a qualified debt education course.

• Pass the broader House proposals, HR 1052 and HR 1060, introduced by Rep. LaFalce (D-NY), to rein in unfair credit card practices.

• Reject the credit card company-driven bankruptcy conference report, which hurts victims of the recession without addressing any of these problems.

The state PIRGs also recommended that campus administrations establish mandatory debt education programs, free from credit card company interference, and also ban or strictly regulate credit card marketing on campus.

"We commend Sen. Sarbanes for holding this hearing," Mierzwinski concluded. "We hope to work with him to ensure that college students get a fair deal, not a raw deal, from unscrupulous credit card companies.

U.S. PIRG is the national lobbying office for the state Public Interest Research Groups. State PIRGs are non-profit, non-partisan public interest advocacy groups.

"The Burden of Borrowing" (2002) and other state PIRG reports on rising levels of student loan debt is available at

"The Credit Card Trap" (2000) and other state PIRG credit card reports and consumer fact sheets are available at See also "The Campus Credit Card Trap" (1998) at

A state PIRG summary of recent regulatory and legal actions against credit card companies is available at