Universities deny Regents’ request to see contract for student credit card agreement
Posted on October 9, 2007 in Schools & Education by DM
Can you imagine any corporation saying to its board of directors, “Yes we’ve entered into a private agreement with a company that uses our customers’ private identifying data and stands to be profitable for our business, but no you may not see a copy of the contract we have with that company” ??? That’s just what it sounds like two of our state universities have done to the Iowa Board of Regents, attempting to keep confidential the details of an agreement they have with Bank of America for credit card marketing to students and alumni.
These two items, outlined in the article linked above, seem especially troubling:
- While Iowa State University and the U of I give Bank of America access to information and campus facilities in return for cash guarantees, the contracts with the bank appear to have bypassed the state’s open-bidding process by being routed through the alumni associations.
- The average balance on the students’ university-branded cards was more than $1,000 at all three schools. Previously, ISU alumni officials said the average student’s balance was $389. The balance is significant because the credit limit on some student cards is just $1,000, and students who exceed their limit are subject to penalties, such as a 30 percent interest rate.
I may be overly sympathetic on this one; I’ve said - ironically since my college days some 25 years ago - that credit card companies should be more particular about who receives cards. That’s because I did NOT have the discipline to use these tools wisely, and my credit suffered for years because of it.
I certainly don’t think they’ve learned anything in a quarter-century, either. My thirteen-year-old daughter just got a solicitation in the mail last week noting that she was “pre-approved to apply” for a card. How did they get her name? When she was five, I put her name on a donation we sent to Paralyzed Veterans of America so the neat little return address labels they sent us would have her name on them. The credit card offer was for a PAV-branded card.
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I think this is horrible… Our generation has already racked up more debt than other generations. The last thing we need is a credit card company recruiting us on campus.