Guide to Education Grants

At different levels of government, lawmakers are responding to another, perhaps much more dangerous, element of the student debt problem:  credit cards.   According to American Banker, in addition to Congress’ scrutiny of the credit card industry in general, several states are addressing the marketing practices of credit card issuers on campus.
 
The state laws do not prohibit the practice of marketing on campus altogether, instead they further regulate it.  For instance, the California legislature just passed a law prohibiting the offering of free gifts for students on campus, and Texas requires schools that allow card issuers on campus to provide financial literacy courses as part of their freshman orientation.  An Oklahoma law prohibits colleges from selling student information for marketing purposes to credit card companies, and a Louisiana law does not allow solicitations during class registration.
 
Interestingly, American Banker also reported that the original Oklahoma law outlawed credit card marketing altogether on school property.  However, the law was softened when officials from the University of Oklahoma said an exclusive marketing agreement with one card issuer provided the school with $1 million. 
 
Additionally, a report this week on “The Early Show,” the CBS morning program, said that similar agreements are the norm at most colleges.  Although it is extremely rare for a credit card company to offer its customers terms as favorable as a student loan, and the affinity agreements are often exclusive and very, very much like the ones identified as “deceptive practices” for student loans, New York Attorney General Andrew Cuomo and others have, so far, remained silent on this issue.     

This entry was posted on Sunday, October 7th, 2007 at 12:00 pm and is filed under Education Funding News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.