File this under “you thought credit card companies are shameless, and now colleges are helping them out.”
Last week, the New York Times had a terrific article on how colleges sell lists of their students, alumni, and staff to credit card companies- in one case at $25.5 million over 11 years- and use those deals to market their cards using the colleges’ emblems and mascots. This comes on top of the numerous credit card solicitors already hanging out at football games, bookstores, student unions, and on the first week of school, offering a mini basketball or blanket in return for credit cards with shady conditions and astronomical rates.
Certainly, students have the right to behave as foolishly as they want. But this article smacks of parallels to the tobacco industry, which also markets to very young adults in an attempt to get them hooked on their product for life at a very young age.
One topic of interest for me lately is the credit card business model, and determining how much longer it can be sustainable. With their numerous ads, direct mail marketing, and these enormous deals with colleges, obviously credit card companies devote enormous resources to marketing. While I don’t doubt that their business model works, it seems like banks would want to control how shameless they look, especially in light of most of them receiving funds through the TARP bailout.
This is a great article, and I’m glad you shared it. Part of the problem is that our universities are underfunded and so they have to look to other sources for revenue. This doesn’t make preying on college students right, but when universities are being asked to shave 10-15% off of their budgets due to decreasing federal and state support, they start looking for other avenues without raising the cost of tuition too much. All of the universities in that article are public, four-year universities. The Harvards and the Stanfords have big endowments that they can turn to (Harvard’s endowment is $34 billion!), as well as generous alumni, so they don’t need to diversify income sources. Conversely, state schools have absolutely no defense or buffer in times like this.