The UNM chapter of the Public Interest Research Group is supporting reforms to help students understand and control credit card debt.
A U.S. General Accounting Office Report released last month showed that college students with credit cards carry an average debt of $2,748. The federal report cited three surveys, including one by the Nellie May Foundation, which found that about 78 percent of all college students own one or more credit cards.
"These surveys show that students are really losing out because they don't realize what they are getting into until the debt is unmanageable," said Shannon Lumpkin, director of the UNM chapter of PIRG.
During the last year, PIRG and state legislators sought to change the way credit card companies solicit students and the services available to students. Several U.S. representatives also have taken an interest in the problem, prompting them to offer several bills this term to reform rules that mandate credit card companies' presence on public campuses.
PIRG is pushing for reforms initiated by legislators and University administrators.
The group is asking schools to prohibit high-pressure marketing tactics, such as paying student groups based on how many members sign up for credit cards.
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PIRG also recommends restricting popular free gifts.
"Those T-shirts are totally there to lure you, and before you know it, you're filling out forms for several cards just to get a shirt," Lumpkin said. "I know because I was really tempted by that."
Lumpkin said that she wants to see more equality in gift giving.
"They should give you a shirt regardless of whether you sign up for the card," she said.
PIRG also recommends providing more credit and debt education materials on campus. The group said that colleges should provide credit card and debt education materials adjacent to credit card solicitors, in campus centers and other prominent public places.
"We have worked on this for awhile, but as far as we know, UNM doesn't have any real debt counseling services for students outside of the loans they take out through financial aid," Lumpkin said. "That's going to be our next step on this project. We want to get better services set up for students to prevent and deal with debt."
The group is asking lawmakers to strengthen consumer protection laws by outlawing practices such as failing to disclose penalty annual percentage rates and making minimum monthly requirements too low. PIRG also is pushing to end the use of "bait and switch marketing," which refers to the companies' practice of giving students a card with harsher interest rates if they do not qualify for the card they signed up for.
PIRG is asking legislators to empower consumers by improving disclosures such as clearly stating the time amount of time and interest required to pay off a balance at the minimum payment rate and clearly stating when penalties and higher interest rates go into effect.
"We are just asking for the enforcement of fair marketing," Lumpkin said. "No one is really pushing to shut credit cards down on college campuses, we just want the solicitors to be honest with students."
The General Accounting Office report noted a New Mexico Senate memorial signed in the spring of 1999 that requests state educational institutions to eliminate or curtail on campus solicitation of credit cards. A memorial is only a recommendation and does not impact state law.
Pending items in Congress regarding student debt include the College Student Credit Card Protection Act, which is now before the House of Representatives.
