I posted before on how universities seek profits instead of helping students develop good financial literacy and habits. Here are some tips on how you should use your credit card. College Credit-Card Hustle
Using state public disclosure laws, Business Week 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.
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Universities rarely negotiate favorable terms for their students, according to people familiar with the practice. On the contrary, some schools and booster groups entice undergraduates to sign up for cards with low initial interest rates that are soon replaced by steep double-digit rates.
Schools (and if some try to play legal games about alumni associations being separate, I don’t accept that) should fully disclose exactly what they are doing. I know they can make all sorts of excuses about why being open and honest is not right for them. Well, I think it is easy to predict they will be selling out their students and hiding that fact (if they must be open about what they are doing they will avoid some of the most egregious behavior because they know there will be consequences if they obviously sell out students). And, now Business Week has evidence that many are.
If a school is not open and honest about the deals they are making just assume they are selling out the students for their own gain. I can’t really see why we would want to support such behavior and I would encourage us not to.
It is possible some will put the students interests first and then not want to verify they are doing so with public disclosure. I guess I am too cynical to accept such claims anymore. Too many of schools have sold out students for financial gain (not just on credit cards, student loan scandals…). So I just can’t take the word of schools that they are doing what is right for students but just don’t feel like publicly disclosing all the details.
Credit card companies (or anyone else) trying to play on the poor ability for people to think with teaser rates and the like are bad enough. Organizations that supposedly exist to benefit their members (students for school or alumni for alumni associations) that try to trick members into bad decisions need to have their leaders replaced. We have gotten so used to boards and senior leaders that do things that are so egregious that we don’t even think of trying to con those you supposedly exist to help as completely unacceptable behavior.
Related: Legislation to Address the Worst Credit Card Fee Abuse, Maybe – Americans are Drowning in Debt – Politicians Again Raising Taxes On Your Children – Predatory Lenders’ Partner in Crime