ASUO President Emily McLain and U.S. Sen. Ron Wyden discussed the effects of rising student credit card debt Wednesday as Wyden announced federal legislation to create a system for rating the consumer-friendliness of credit cards.
Wyden met with a group of students and administrators in the Umpqua Room of the EMU and listened to concerns about constant credit card solicitations and mounting debt. In attendance were representatives of OSPIRG, student government, College Democrats, and a couple of students not affiliated with any campus group. Director of Student Financial Aid Elizabeth Bickford and Interim Dean of Students Laura Blake Jones represented the administration.
“Right now we are at a time in Oregon where it is more important than ever to receive a post-secondary degree,” McLain said at a press conference later in the morning. “And at the same time it is becoming increasingly difficult to do so without incurring excessive amounts of debt.”
Wyden asked how students at the University fared with the burden of debt and was told some are using credit cards to buy food and pay rent. “All those luxuries,” he quipped.
Other universities have banned credit card companies from setting up tables on campus to solicit students. When meeting with students, Wyden asked what the University’s policy was and seemed surprised at the comparatively high level of solicitations here.
McLain told the senator that the ASUO disallowed companies from soliciting at semi-annual street fairs, where McLain herself signed up for a credit card her freshman year. But companies are still paying the highest possible rent for tables in and directly outside the EMU.
One student told Wyden of an inflatable house that had been set up by one company to entice students to sign up for financial services. After climbing into the house students had to try to grab as many flying dollar bills as possible. “Pretty subtle, huh?” Wyden said. “Rush into a room and grab some money. Not much ambiguity in that strategy.”
Students complained of the volume of credit card solicitations they receive in the mail. One said he gets seven to 10 advertisements per week. While McLain voiced concern about the glossy, sensationalized nature of the ads designed to target students who are not financially savvy, Student Sen. Neil Brown said it’s worse when the advertisements appear to be something more substantial.
“My grandmother, God love her, sent a big envelope of important mail,” Brown said. Most of the items sent from home were actually credit card solicitations designed to look like bills and other “urgent notices.”
Wyden said that under the legislation he is proposing, companies with obscure terms of agreement would be penalized while others that clearly highlight terms – even if they have higher interest rates – would receive a higher rating.
The bill would create a five-star rating system similar to safety ratings for automobiles. It wouldn’t impose regulations on the credit card industry, but would require the Federal Reserve to rate cards based on the transparency of their terms of use.
Companies could use the stars on cards and on all marketing materials. The blown-up sample card next to Wyden’s podium showed stars at the bottom, with three out of five filled, illustrating how companies could flaunt a high safety rating.
Wyden said he hopes the legislation can gain some traction during Congress’s short December session. While he expects the bill to encounter opposition from creditors, he portrayed resistance thus far as weak. He said opponents are saying they know there should be better disclosure, “but this is sorta, kinda not the way to go,” he said was their current strategy.
“I know this is going to be a tough battle,” he said.
The ratings would not be required to be displayed on cards, but the Federal Reserve would publish the numbers online.
College Democrat Tony Kaminski asked Wyden how the system would help eliminate the need to buy food with a credit card.
“This is certainly not going to be a panacea” of debt relief, Wyden replied. But he said it would be a start. McLain agreed that the bill would raise the level of dialogue and could open the door to discussions of policies such as loan forgiveness for students who take public sector jobs.
The ASUO is a non-partisan institution and McLain said she was present not to endorse any candidate but to address an issue of importance to students.
“I’m surprised we don’t have more student government leaders here,” she said. Along with McLain, Vice President Chii-San SunOwen, Gender and Sexual Diversity Advocate Zach Wegner, and Sens. Brown and Noor Rajabzadeh met with Wyden. Emerald Freelance Editor Jobetta Hedelman also took part in the press conference by sharing her story of debt.
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