Will a new law protect students from predatory credit card companies?
Alicia Elgar got her first credit card before she headed off to college. She quickly maxed it out and, $5,000 in debt, found another offer poking out of her mailbox midway through her junior year at the University of New Mexico. The 23-year-old biology major is $9,000 in credit card debt, swimming in student loans, working two jobs and trying to finish her degree.
“I’m definitely taking advantage of student loans,” she says. “I should be able to pay it off here in a couple years.”
Elgar admits she might be in a better spot if that Bank of America credit card never appeared in her mail pile. She doesn’t know how the bank got her address, but she suspects UNM might have distributed her information to the credit card company.
State Sen. Michael Sanchez (D-Belen) had a similar hunch about how such companies pad their mailing lists. At the Legislature’s regular session, Sanchez introduced and helped unanimously pass Senate Bill 152, which prohibits New Mexico universities from selling or distributing student information to credit card companies. The bill also kicks credit card booths off campuses. The law goes into effect on Wednesday, May 19.
Sanchez says students are susceptible to falling into credit card debt, especially those who’ve just left home. “I have been approached by some parents whose students have been given credit cards or have been sent credit card applications. [The students] have, of course, filled them out and have gotten their credit cards and gotten into some real serious debt,” he says. “But it seems to me that these credit card companies get a lot of information and are allowed on the campuses.”
According to a 2009 Higher Education Department study, 30 percent of college students paid tuition with their credit cards, a 24 percent increase since 2004. The HED also found that more than half of college students reporting ownership of more than four cards.
However, Terry Babbitt, UNM’s associate vice president for enrollment management, says the passage of Sanchez’ bill had little effect on UNM. He says the university absolutely doesn’t sell student information but also makes it difficult for companies or any other entities to harvest lists of students.
“At UNM it was never the practice,” he says. “For someone to request names and addresses of our students, they have to go through a real complicated process. We don’t make it easy, and we don’t just release the names.”
“But it seems to me that these credit card companies get a lot of information and are allowed on the campuses.”
State Sen. Michael Sanchez
Babbitt said New Mexico universities have comprehensive directories of students, faculty and staff, databases that he said are public records. At UNM, the directory offers a student’s name, course of study and e-mail. However, he said some state universities could conceivably offer a student’s name, phone number and even address to anyone, including a credit card company.
“Some schools could easily interpret, and it could be well within the law, that their student directory information is name, address, phone number,” Babbitt says. “So, if Chase Bank or someone requests that, they could very easily turn that list over and then those people are mailing them stuff. But I don’t know who was doing that.”
Babbitt also says students may opt out of the public directory at UNM.
The directory at New Mexico State University readily offers a student’s name, e-mail and major, as well as his or her address. Angela Throneberry, associate vice president for business and finance at NMSU, said in an e-mail that Sanchez’ bill doesn’t affect any “existing contractual relationships.” However, NMSU has a contract with Wells Fargo to provide checking accounts, ATM cards and other services, she says.
“Although the agreement does allow for the release of student direct mail and e-mail lists for the purpose of creating an awareness to the NMSU Card Program and related services, no listing has been provided to or requested by Wells Fargo,” she says.
Central New Mexico Community College spokesperson Brad Moore said the community college doesn’t see credit card companies tabling on campus, and its directory only offers students’ e-mails.
Still, Sanchez says he’s seen credit card companies at UNM’s student orientation, targeting students when they first step on campus. “They had different credit card companies there with sign-up sheets and different special things that they were going to give you if you signed up now,” he says.
As for credit card companies advertising on campus, Debbie Morris, director of student activities at UNM, says credit card companies haven’t tried to sell their wares on UNM soil for, say, 10 years.
“Years ago ... they would throw up a table anywhere,” Morris says. “They’d give you a free T-shirt if you signed up for a credit card.”
But even before SB 152 passed, Morris says, credit card companies stopped trying. She says her office wouldn’t allow them set up on campus, regardless of the Legislature’s actions.
“I think it’s just how the industry has changed or something,” she said. “Those people used to be a real problem, but that hasn’t been an issue for quite a while. It hasn’t even been on our radar.”
Alicia Elgar, the student in debt, still isn’t sure how that credit card found its way to her mailbox. She wishes she’d just stuffed it in the garbage. Her advice to freshmen is to be careful with their spending and think twice before signing up, but also to “Check your APRs, and just make sure you pay off as much as you can if you have to make big purchases.”
She says she’s gotten over the worst of the debt. Last summer, she says, she had to raid her piggy bank for $5 in gas money. Nowadays, though, the weight of her credit card debt has receded to the back of her mind, mostly serving as a reminder to be fiscally responsible.
“There’s lots of other stuff that I’d rather use the money for, like maybe a new car, instead of just paying it off. It just seems like a waste of money,” she says. “I don’t think that’ll ever happen again.”