Magazine article Mother Jones

Don't Leave College without It

Magazine article Mother Jones

Don't Leave College without It

Article excerpt

Universities are cutting big-dollar deals with credit card companies, and students are paying the price.

on Selden never had a credit card before he went to college. But a few weeks after arriving at Brigham Young University, he received an offer mailed to his dorm room for a preapproved Citibank card. Before Selden even managed to find a job or establish a credit history, he was running up thousands of dollars in debt.

Credit card companies like Citibank aren't the only institutions profiting from student spending. Like other colleges and universities across the country, Brigham Young has done a lucrative business with big lenders, enhancing university revenues at the expense of students. BYU received an estimated $70,000 last year in exchange for stuffing offers for Citibank cards into 1 million shopping bags at the university bookstore. The University of Tennessee has a seven-- year, $16.5 million deal with First USA that gives the company the names and addresses of alumni, employees, and more than 40,000 students. The University of Michigan and Michigan State have struck similar deals with MBNA, the self-proclaimed "world's largest independent credit card issuer," worth an estimated $14 million.

Companies are focusing their marketing efforts on the 250 largest public schools and their highly profitable student populations. But while universities profit handsomely from the deals, many students wind up deep in debt. Ten percent of all college students owe $7,000 or more to credit card companies, and the number of people under 26 filing for bankruptcy tripled between 1995 and 2000. "They are trying to entrap students in debt," says Robert Manning, author of Credit Card Nation.

First USA offers cards through 200 schools, including Yale, Notre Dame, and Duke, and now markets them through fraternities and sororities. …

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