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June 08, 2009 - Image 4

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Michigan Daily Summer Weekly, 2009-06-08

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Monday, June 8, 2009
The Michigan Daily - michigandaily.com

Mry fidigan &Dilt
Edited and managed by students at
the University of Michigan since 1890.
420 Maynard St.
Ann Arbor, MI 48109

Excessive benefits




Unsigned editorials reflect the official position of the Daily's editorial board. All other signed articles and illustrations representsolely
the views of their authors.
Adult supervision required
Credit CARD Act discourages young adult financial independence
.College students need a babysitter. Or at least that's what the feder-
al government thinks, if the Credit Card Accountability, Respon-
sibility and Disclosure Act of 2009 is any indicator. The Credit
CARD Act requires all credit card applicants under the age of 21 to have
a co-signer above the age of 21 or to prove their ability to be responsible
with a credit card. But the law doesn't respect the autonomy of college-
aged individuals as legal adults and hurts their financial independence.
Though the CARD Act has its merits, the federal government should
reevaluate the need to treat young adults like children.

A salary; medical, dental,
vision, prescription, and life
insurances; retirement savings
partially matched by the Uni-
versity; and legal and long term
disability plans don't seem to be
enough benefits for University
staff members. According to an
article in the Ann Arbor News on
May 23, they are requesting sub-
sidized tuition for their depen-
dents, citing the recent economic
downturn as the reason and put-
tingthe needs of their dependents
before the 41,000 tuition-paying
students at the University (Uni-
versity of Michigan cool to tuition
benefitfor staff 05/23/2009).
Specifically, staffers are asking
the University to match funds in
the Michigan Education Trust -
a program in which parents can
pay tuition for a state university
early at a rate that will not change
when tuition is raised in later
years. The staffers are request-
ing a match of up to $3,000 per
dependent. They argue that for
the University to remain com-
petitive with other institutions,
it must create some sort of tuition
program for its employees.
But the University already
providesha considerable number
of benefits. University spokes-
woman Kelly Cunningham was
quoted in the Ann Arbor News
saying the University is already
"at or above average" employee
benefits. This alone negates the
argument staffers are putting
forward about attracting top
consequences for the University.
Subsidizing tuition for employ-
ees' children would be extremely
costly. There are 36,000 people
employed full time by the Univer-
sity in Ann Arbor, Dearborn and
Flint, not including graduate stu-
dent instructors and researchers.
Who would pay the extra cost that
such a financial burden would
place on the University?
Staffers suggest the Univer-
sity could make up the differ-
ence with discretionary funds
and private donations. This sug-
gestion is naive and misguided.
If there is extra money floating
around, it should be tapped for
the student body as a whole, to
fund programs to cutatuition for
all students. Today's economy is
tough for everyone, not just those
who happen to be progeny of
University staff. If the University
can only afford to cut tuition for
a small handful, the qualification
to obtain aid should be based on

financial need, not employment
with the University.
The reality is that the Univer-
sity is raising tuition for every-
one. The Board of Regents have
made it clear that there isn't
enough money to maintain the
University's current operations
- let alone proposed additional
costs like subsidized tuition for
the children of University staff
- without raising tuition once
again. If extra money is going to
come from anywhere, it's likely to
come fromthe pockets of students
already paying full tuition. To
ask already financially burdened
students to subsidize the educa-
tion of the children'of University
employees is a selfish demand.
The staff argues that in these
tough times, the University
should be taking care of its own.
While the University acknowl-
edges this, it also must recognize
that it has an equal responsibility
to each of its students - not just a
select few. If the University were
to raise tuition yet again to com-
ply with this request, it would be
ignoring the needs of the major-
ity of its students.
The good news is that the Uni-
versity doesn't seem inclined to
oblige this request. The Univer-
sity feels the strain of the failing
economy, too, and it doesn't think
that its staff is in danger of being
stolen by universities with bet-
ter tuition plans for dependents.
The case presented by University
employees fails to provide a suf-
ficient reason for the tuition plan,
other than not wanting to pay for
their children to go to college. If
that alone were a good enough
reason, everyone in the country
would qualify for a tuition plan.
The clincher that makes the
staffer's request ridiculous lies
in the nature of the MET. MET
tuition can go toward any of the
13 public universities in Michi-
gan. That means the University's
money could pay for a college
education at another college,
which is absurd. The Univer-
sity would see zero return on its
investment. Education for every-
one is important, but this request
goes too far.
And this proposal means an
even darkerrpossibility - tuition
could be raised to subsidize
tuition for University staffers
who could use the money to send
their kids to Michigan State Uni-
versity. Ouch.
Erika Mayer is an
LSA sophomore.

President Barack Obama
signed the Credit CARD Act
into law on May 22 to protect
American consumers from some
of the unfair practices of credit
card companies. The law was
designed to help credit card
holders make informed financial
decisions by banning retroac-
tive rate increases and fees and
making credit card terms clear-
er. But Title III of the Credit
CARD Act goes further, estab-
lishing barriers before young
adults can obtain a credit card.
The law mandates that credit
card 'applicants under 21 have
"a parent, guardian, or other
qualified individual" co-sign
their credit card application or
prove their financial responsi-
bility. If young adults decide to
take full responsibility for their
credit card and can't provide
documentation that convinces
a credit card company they are
financially stable, they will be
required to complete a financial
literacy course.

It's admirable that the fed-
eral government has decided to
protect consumers from credit
card companies' misleading
tactics. The Credit CARD Act
protects consumers from hid-
den fees and rate increases. It
ensures that consumers can eas-
ily understand their credit card
terms and decide if they are able
to successfully use them. But
this decision should be left to
all consumers, not only those
21 and older.
Despite the good qualities
of the Credit CARD Act, the
restrictions laid out in Title III
seem like a lot of work to obtain
a card that makes a financially
stable future possible. While
it's nice that the federal govern-
ment wants to protect younger
citizens, this clause is a major
stumbling block for young
adults who are ready for finan-
cial independence.
By making young adults jump
through more hoops to obtain
a credit card than older adults,

the federal government is tak-
ing the view that college-aged
people aren't really adults yet.
But as legally-recognized adults,
18-year-olds have most of the
same rights and responsibilities
as other adults. Also, many 18-
to 20-year-olds are financially
independent and work on their
own. Many - especially col-
lege students and lower-income
young adults - don't have easy
access to a financially stable co-
signer, a full bank account or
time to complete a financial lit-
eracy course. But they still need
the benefits of a credit card, like
convenient purchases and estab-
lishing good credit history.
Instead of allowing young
adults the freedom they need
to gain financial stability, the
federal government seems com-
mitted to mollycoddling them.
At some point, the federal gov-
ernment needs to realize that
college students aren't kids any-
more and that they need to learn
to take care of themselves.

Tell us what you think. Send letters to tothedaily@umich.edu or visit michigandailycom and click on 'Letter to the editor.'
Editorial Board Members: Erika Mayer, Asa Smith, Brittany Smith, Vivian Wang, Patrick Zabawa

Check out more from Daily columnists online on Wednesday and
Friday. Go to michigandaily.com and click on 'Opinion.'

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