State law seeks to protect college students from credit predators

SPRINGFIELD - With college students about to head off to campus, Illinois is enacting a new law intended to crack down on freebies credit card companies use to entice students to apply for cards.

Gov. Pat Quinn on Tuesday signed into law a prohibition on free gifts that have included things like T-shirts and pizza.

The prohibition is intended to prevent students from being bombarded with card applications and then impulsively signing up for credit cards they can't manage and ending up thousands in debt before they leave school. It was pushed by Illinois Treasurer Alexi Giannoulias and overwhelmingly supported by lawmakers.

"When freshmen arrive on campus in the coming weeks, many of them will be on their own for the first time. Credit card marketers know many are vulnerable at this time and may be looking for extra cash," Giannoulias said, noting the plethora of goodies students are given for filling out applications.

Recent information compiled by student loan organizations reveal more than half of graduating students have four or more credit cards and more than $3,000 in credit card debt.

The law, which takes effect Jan. 1, requires schools that enter into agreements with credit card companies to offer financial education classes intended to inform students about the consequences of debt.

Another provision bars all colleges, universities and schools, including student and alumni associations, from selling student information to banks and credit card companies.

Violations of the law could warrant a $1,000 fine per incident.

Giannoulias said the intent is not to ban college students from having credit cards but rather to limit the "bombardment" of applications.