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The College Credit-Card Hustle

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flashl Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 07:00 AM
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The College Credit-Card Hustle
Universities and their alumni associations have discovered an unlikely and disturbing source of revenue: Increasingly, they are selling students' personal information to big credit-card companies eager for young customers.

Using state public disclosure laws, BusinessWeek has obtained more than two dozen confidential contracts between major schools and card-issuing banks keen to sign up undergraduates with mounting expenses for tuition, books, and travel. In some instances, universities and alumni groups receive larger payments from the banks if students use their school-branded cards more frequently.

The growing financial alliance between schools and banks raises questions about whether universities are encouraging students to incur additional high-interest debt at a time when many young people graduate from college owing tens of thousands of dollars. Most undergraduates lack substantial income of their own and are especially vulnerable to late fees and other penalties if they fall behind on monthly payments.

BusinessWeek's investigation parallels a separate probe by New York Attorney General Andrew Cuomo. He is looking into a range of relationships between schools and financial institutions. "It seems that the schools are simply selecting the university credit card based on who pays the school the most, and that may not be best for students, especially in these hard economic times," says Benjamin Lawsky, a Cuomo aide. Last year, Cuomo cracked down on ties between colleges and private tuition lenders, some of whom were paying schools to promote them to financially strapped students.

Yahoo Business

Another 'revelation' long after the 'horse is out of the barn'. The recent student loan scandals should have been a hint.

Wonder, if the investigators' crystal ball allows them to see the mandatory college student insurance scam coming? Or how about some campuses computer networks ONLY works for you if you have a Dell or HP computer?
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