Cuomo investigate SUNY student credit card practices

College isn't cheap, the average student walks away with around $23,000 in student loan debt. Add to that the fact that the average student also accumulates around $4,100 in credit card debt. That added credit card debt is exactly what New York Attorney General Andrew Cuomo set his sights on when he created a code for The State University of New York to live by. Cuomo outlined several steps that SUNY needed to make to reduce and monitor the amount of credit cards that are marketed toward its students.

The code is meant to safeguard students from exclusive contracts the university has with certain lenders to market credit cards to students. Anyone who has been on a college campus recently will recognize theses tactics. Clever lenders often seduce students into applying for credit cards with tantalizing offers of free Frisbees, pizza, and hacky-sacks.

Universities sign exclusive deals with lenders that give them a cut of the finance charges on a student's credit card. Cuomo's code will ensure that any credit cards being offered on campus will be in the students best interest.
By agreeing to Cuomo's code, SUNY must no longer provide credit card companies with its students' personal information. SUNY will also begin to offer financial literacy programs to empower and inform its student body.

Cuomo commends SUNY "for being at the vanguard of reform", but recognizes that SUNY is just one college out of hundreds that use these exclusive credit card deals to profit off of their students' poor financial planning.

Cuomo's code arises from a 2007 investigation that revealed conflicts of interest involving perks and payments made to universities and financial aid offices by credit card companies in conjunction with new rules regarding student credit cards from the CARD Act.  

The investigation and Cuomo's actions at SUNY are slowly shaking up the $85 billion student-loan industry. Twenty-eight colleges and roughly a dozen lenders have cut their financial agreements.

Josh Frank, a researcher at the Center for Responsible Lending, recommends that students avoid "cards that heavily market to you." This may mean passing up on the immediate pleasure of flinging a Citibank emblazoned Frisbee down the hallway of a dormitory, but when you are debt free, you can buy as many Frisbees as you want.

In addition to student credit cards, Cuomo recently broadened his investigation of the CareCard, a medical expenses credit card some New York Hospitals have been endorsing.

-Adam Scarano