In a great investigative piece on Huffington Post the reporters turned up a bombshell: Some of the nations top school are in line to gain millions of dollars by selling student and alumni names and addresses to credit card companies. The schools get paid more if the person charges more and some colleges are even getting bonuses if the credit card holder gets into debt. Here are some of the key findings from the Huffington Post report:
Our examination of affinity agreements involving some of the nation's largest and most prestigious colleges revealed that schools and alumni associations:
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.
This left us kind of speechless but not exactly surprised. That just underscores for us how important it is to tell people to stay out of debt. Ignore anyone telling you otherwise.