Leaders of the Minnesota State College Student Association and Minnesota State University Student Association piggybacked on yesterday’s press conference at the U on the new federal financial aid tool.
They told me they wanted the Consumer Financial Protection Bureau (which held the press conference) to crack down on what they see as abuses in private lending to students.
I’ve read some of their literature and talked to a couple of the officers.
Their three big targets:
- Private student loans. Lenders use “aggressive and misleading” marketing practices, they say, which lures students away from the federal student loan programs that are actually cheaper for them. Students want the bureau to regulate lenders as well as promote financial literacy among students.
- Credit cards. The bureau needs to follow through on recent credit card legislation designed to protect students, but which students say is not being enforced. Among other things, the act forbids arbitrary rate hikes on existing balances, and requires clarity on the interest rates students must pay. Students want the bureau to enforce a requirement that credit card companies and colleges reveal agreements over the marketing and distribution of exclusive credit cards to students. (I need to check the situation here in Minnesota. It may differ from the national average.)
- Debit cards. Campus cards — really a form of debit card — let card issuers avoid credit card regulations, students say. Some have fees much higher than those charged by standard debit cards, and students want the bureau to enforce current rules and update regulations whenever a new financial product enters the market for students.
Amanda Bardonner, chairwoman of the Minnesota State University Student Association, told me:
“Students obviously are a really good target for issues with debit cards, credit cards, student loans. Financial literacy is different with each student. It doesn’t matter what age you are.”