Creditnet News Story
Universities selling student information to lenders
Monday, June 14, 2010
By Sam Lee
More students are leaving college with significant credit card debt every year, and the schools they attended may be contributing to the problem.
There is a growing number of institutions of higher learning across the country that are selling their students' personal information to credit card companies and making millions, according to a new report from the Huffington Post. Both schools and alumni associations are making money off such deals, and the study found that some schools are even getting bonuses when students incur debt.
The report said that banks pay schools $1 per student who keeps a credit card open for 90 days, and that the school gets up to $3 when they carry a balance. The schools can also receive 0.4 percent of all retail purchases made with student cards.
The report said more than 700 schools have such agreements with Bank of America alone, and at least another 100 could have them with other lenders.
A recent report from Sallie Mae revealed that the average undergraduate student carried $3,173 in credit card debt in 2009, the highest level since it began tracking such data.
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