After my most recent payment, I am sitting on $41,176.34 in student debt. I’m completely OK with that, because my degree has already gotten me one job since graduation and I know it’ll prove vital in the future.
My credit card balance, however, is $0.00. I do have a credit card. A secured one, actually. Like many college students, I took out a credit card my freshman year of college. One term, I was forced to charge over $400 in textbooks. I paid this off over the course of eight grueling months. A few years later, I opened a second credit card to help purchase an Apple iBook laptop. The original charge was $1,100, but after several months delinquent, the balance inflated to about $2,500.
Now, I’m in the process of rebuilding my credit through a secured credit card. I put down $300 after I received my tax return and I’ve since used the credit card for puny purchases, after which I go on my iPhone and pay off the balance immediately. I’m paying for the sins I made as an irresponsible, immature 20-year-old.
Coffee nearly shot out of my ears this morning when I read an investigative piece on Huffington Post regarding “affinity” agreements, whereby universities across the country have partnered with credit card companies to provide student information and receive benefits when students activate a credit card. Here are some of the findings from that piece:
“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.”
Public universities across the country have been forced to increase tuition in lieu of strapped state budgets. Meanwhile, private schools have seen rapidly shrinking endowments because of fewer donations and struggling investments. Education has been in a quiet crisis now for the past four years. In a way, it makes sense they would go and make deals with the devils.
And devil’s advocate might say, “Hey, this is one way colleges can increase revenue without raising tuition.” Nonsensical argument, but here’s my retort: Congress should pass legislation mandating colleges who partake in “affinity” agreements to include a required course based on responsible credit card usage for all students in their freshmen year. Oh, and students will not be charged for the class, either.
What do you think? Should these practices be put to an end?