Banks Pay Off Colleges For Student Credit Card Debts
Millions earned by universities that give out personal student information.
Just because you attend one of the finest universities does not exempt you from having your name and address given out to credit card companies. In fact, the Huffington Post Investigative Fund has found that some of the most notorious schools are doing just that while allowing the companies to have special access into school events.
Why would a prestigious university betray their students like this? Money!
The schools and their alumni associations are entitled to receive payments that multiply as students use their cards. Some colleges can receive bonuses when students incur debt.
“The fact that schools are getting paid for students to rack up debt is a disgrace,” said congressman Patrick Murphy, a Pennsylvania Democrat and former professor at the U.S. Military Academy at West Point. He said that banks’ payments to schools amount to “kickbacks.”
·Sell students’ personal information. Many are contractually obligated to share students’ names, phone numbers and addresses with banks.
·Earn royalties: Banks typically pay schools $1 for each student who keeps a credit card open for 90 days. When students carry a balance, some schools can collect up to $3 more per card.
·Cash in each time a student uses plastic: Many schools are entitled to receive 0.4 percent of all retail purchases made with student cards.
·Benefit from marketing incentives: When a university or alumni association agrees to market cards to students itself, the payoff is greater — sometimes up to $60 for each card opened through a school’s own marketing.
·Offer special perks: Banks sometimes gain special access to athletic events. Cornell University must provide Chase Bank with tickets and “priority” parking passes at football, basketball, hockey and lacrosse games.
Still trust your educators? (Huffington Post)
Sarah Polonsky is a senior editor at BettyConfidential.com