First, it is sad that college students are so lame they can’t even understand basic personal finance concepts like high interest credit card debt is very bad. But millions of them seem to actually be that lame (not exactly a great sign from our future leaders :-/). The credit card companies actually claim: “Our overall approach toward college students is to help them build good financial habits and a credit history that prepares them for a lifetime of successful credit use.” Does anyone believe this? A related articles discussed how much cash universities were taking from credit card companies: The Dirty Secret of Campus Credit Cards.
It really isn’t that hard to do the right thing. Credit card companies have learned to profit by gauging their customers. If they claim that they are trying to teach good financial habit then the university to set up a contract to favor that. If bad practices occur (students not paying off the full balance say) they the credit card companies don’t get to make a profit on that – since it would be rewarding failure by the credit card company. How you want to do this is up to you but I can’t think of several ways. It is pretty simple – don’t let the credit card companies profit by encouraging stupid credit card use – like they do now.
Yes, creating a climate where the universities focus on the credit card companies actually doing what they say they want to do is a new way of thinking. But paying universities millions to market exorbitantly expensive financial products that harm students finances and teach them bad financial lessons is not some grand tradition passed down from Cambridge 200 years ago. Obviously neither side minds doing things differently for the right amount of cash. Lets see if they mind doing so to help the students learn. My guess is they will mind doing that. But I will be happy if I am proved wrong. My guess is that some schools would (and maybe even are doing this) – some schools really do care about helping their students learn.
The universities could choose to use their clout to help student instead of just getting a big payday for themselves. That would be a good lesson for students to learn. Much more effective then telling students they really should act ethically and not only chase after the dollars after they graduate. Such “advice” rings pretty hollow if you see that same university selling students out for a quick buck.