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NY colleges alerted to students’ crushing debt

New York State Attorney General Andrew M. Cuomo on Thursday announced a statewide investigation into what he calls deceptive credit card marketing practices that target college students through their schools.

Cuomo’s office sent letters to every college and university in New York, requesting the schools submit any exclusive contracts entered with credit and debit card companies so that they can be examined them for problematic marketing practices. Schools also are being asked to adopt policies to help students avoid credit card debt before graduation.

A release from the AG’s office states that banks and credit card companies target students specifically in part because they are less financially savvy and more likely to incur fees and penalties.

“We want to make sure that colleges and universities are doing all that they can to help students avoid financial dangers,” Cuomo said in a statement. “Schools must ensure that credit card companies are not engaging in deceptive marketing practices and jeopardizing the futures of their students.”

The average college student graduates with nearly $4,100 in credit card debt, on top of an average of $20,000 in loans for students at four-year colleges. The combined debt burden can be overwhelming for new graduates.

A copy of the letter sent to the schools can be viewed at www.ag.ny.gov/media_center/2010/sep/Student_Credit_Cards_Letter.pdf.