Colleges, universities and their alumni associations pocket millions of dollars a year via lucrative deals with banks and credit-card companies that peddle to students, faculty and alumni.
By selling coveted mailing lists that can number into the hundreds of thousands of names — and even include athletic boosters and school donors — the schools have set up a never-ending stream of revenue that takes little more than a signature to generate.
Some schools even get a percentage take of every credit-card purchase or debit-card transaction a student or alumnus makes, according to copies of the deals reviewed by The Denver Post.
Colleges say they’re merely helping students learn financial responsibility; banks say they’re simply offering a needed service and funding.
Critics contend it’s just another way to make money on the backs of individuals already burdened by an economic slump.
“Young people are the future. If a bank can get them at the beginning, it’s long-term marketing,” said Gale Hillebrand, chief counsel at Consumers Union, which publishes Consumer Reports. “The debt treadmill is designed to generate revenue for years.”
The contracts reviewed by The Post contain various provisions that translate into money for Colorado schools. Among them:
— Royalty payments as high as $550,000 — and bonuses of up to $50,000 a year — based on the number of credit cards or bank accounts opened by students or alumni.
— Monthly payments up to $300 for ATM machines placed in strategic campus locales.
— ATM and debit cards tied to student IDs with payments for each new account — and bonuses when they’re used.
Marketing access to all home athletic events such as football and basketball games.
Bankers say they’re filling two needs: those of students just getting started and those of schools in need of revenue.
Read on.
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