By MARY PILON
The CARD Act may be having little effect on students, according to new research.
The CARD Act's provisions that impact students took effect in February of last year and were aimed at curbing practices that lured students in with freebies and, in some cases, left them saddled with big credit-card debt loads when they left school. Under the new rules, pre-approval offers by mail to anyone under 25 is no longer allowed, students--and anyone else under the age of 21--must prove they have sufficient income to pay off credit card debt they incur, have a parent or family member co-sign their credit card contract or be added as an authorized user on a parent's credit card rather than opening their own. And universities are also now required to disclose to the government any relationships they have with credit card companies.
But professor Jim Hawkins at the University of Houston Law Center surveyed over 300 undergraduates in November and found that "there are some things that haven't changed." The survey's findings will be released at a consumer law conference today.
Some 76% of those surveyed under the age of 21 said they had received a credit-card offer since the beginning of 2010. And some 73% of freshmen surveyed reported seeing card issuers marketed o students off campus.
What's more, roughly a third of freshmen already had a credit card when they landed on campus, Prof. Hawkins' survey found. A full 29% of students under 21 who obtained a credit card since starting school this academic year used student loan proceeds as part of the income they reported to card issuers in their credit card applications.
When it came to dealing with the consequences of the debt, 64% of students said they planned to pay their debts and 21% said they expected someone else to pay it.