College students who lack a financial safety net to assist with higher education expenses might experience some difficulty accessing credit when a new law signed by President Barack Obama in May becomes effective in February 2010.

The new law, the “Credit Card Accountability, Responsibility and Disclosure Act of 2009,” has many provisions that specifically target young collegians. Title III of the new legislation aims to protect young consumers by requiring students under 21 to have a co-signer, show ability to pay monthly bills or prove that they have completed a financial literacy course.

Nearly 80 percent of American families have credit cards, paying about $15 billion in penalty fees annually. The law is designed to foster more “transparency, accountability, and mutual responsibility,” according to the White House. For example, the law requires advance 45-day notices on APR increases and that statements tell credit card-holders how long it will take to pay off a balance and what it will cost in interest if they only make the minimum monthly payments.

While the legislation is protective in nature, it presents several risks and “unintended consequences” for vulnerable students, says Dr. Karen Gross, president of Southern Vermont College in Bennington, Vt.

Gross, who directs New York Law School’s Economic Literacy Consortium, says that while the law’s provisions generally address practices that are problematic in the credit card industry, such as sudden interest rate increases, the law presents barriers for students who rely on credit cards to “even cash flow during the beginning of the semester and during semester breaks.”

The former law school professor, who specializes in consumer finance and asset building in low-income communities, contends that credit card debt among students is rising because they are using credit cards to close the educational gap as the cost of college tuition continues to rise — not because students are abusing credit cards to pay for leisurely items.