Banks Paying Colleges For Students Who Rack Up Credit Card Debt

[Woodchuck]

http://news.yahoo.com/s/huffpost/604109

Banks Paying Colleges For Students Who Rack Up Credit Card Debt

By Ben Protess and Jeannette Neumann

Some of the nation's largest and most elite universities stand to gain millions of dollars from selling the names and addresses of students and alumni to credit card companies while granting the companies special access to school events, the Huffington Post Investigative Fund has found.

The schools and their alumni associations are entitled to receive payments that multiply as students use their cards. Some colleges can receive bonuses when students incur debt.

The little-known agreements have enriched schools and some banks at a time when young women and men already are borrowing at record levels, raising questions about whether such collegiate and corporate alliances are in the best interests of students.

"The fact that schools are getting paid for students to rack up debt is a disgrace," said congressman Patrick Murphy, a Pennsylvania Democrat and former professor at the U.S. Military Academy at West Point. He said that banks' payments to schools amount to "kickbacks."

[fdeck]

Credit card companies have targeted college kids since the dawn of time. We were inundated with credit card offers. Fortunately, my parents taught me about how money and credit work.

[blendermassacre]

I'm not surprised. Chase came out to the domino's that my father in law owns, and passed out fliers to students at UMKC to come get a free pizza if they applied for a credit card. Luckily, they were inundated with homeless crazies who were hungry.

[bassguppy]

Do students in other countries who get all or most of their college paid for get this crap?

[elgecko]

It's pretty sickening considering a lot of these students have taken out student loans.

"Congratulations, welcome to the working world! Now spend the next 10 years of your life paying it off!"

[tplyons]

Originally Posted by elgecko

It's pretty sickening considering a lot of these students have taken out student loans.

"Congratulations, welcome to the working world! Now spend the next 10 years of your life paying it off!"

10 years, you're lucky... I've been out of school for a year and have 14.5 years left on my loans.

It's sickening to see schools taking advantage of students in a time where they are so financially burdened, and naive at the same time. A lot of people see credit cards as free money and seldom consider the repayment, bringing college grads into the real world with tons of debt and an already ruined credit rating.

[Bongolation]

Originally Posted by Woodchuck

The little-known agreements...

What rock have they been living under?

This has been common knowledge and the subject of outrage journalism during slow news cycles for at least the past ten years.

[McHaven]

Colleges have never done anything in the best interest of their students. I'm not surprised at all.

[elgecko]

Originally Posted by tplyons

10 years, you're lucky... I've been out of school for a year and have 14.5 years left on my loans.

I paid up front and graduated without owing anyone a cent.

I'd highly recommend the same for any current/future college student if they can. I'd also recommend against any credit card debt you can't pay off in 1-2 months.

[warnergt]

Because student loans are so easy to acquire, enterprising colleges are
paying homeless people to enroll. The math makes sense when you
think about it: if paying someone a $2,000 “stipend” gets the college
$20,000/year in tuition courtesy of the federal government, that’s money
well spent. Unfortunately, many people who accept such “stipend” offers
never graduate, become overwhelmed with student debt, and destroy
their already bad financial records.

[jp58]

Originally Posted by bassguppy

Do students in other countries who get all or most of their college paid for get this crap?

Originally Posted by elgecko

It's pretty sickening considering a lot of these students have taken out student loans.

"Congratulations, welcome to the working world! Now spend the next 10 years of your life paying it off!"

Very sad and very true. I know that the school I attend makes a ton of money with US bank. We get credit/debit card from there beginning the day we enroll. Our student Id's even double as credit/debit cards for them.

[bassguppy]

Originally Posted by warnergt

Because student loans are so easy to acquire, enterprising colleges are
paying homeless people to enroll.

OK, now I'm pissed after reading that.

[jp58]

Originally Posted by bassguppy

OK, now I'm pissed after reading that.

Well we make money off of everything else in this country, why not make it off of the gov't and students trying to make a better life for them self?

[Woodchuck]

Originally Posted by warnergt

Because student loans are so easy to acquire, enterprising colleges are
paying homeless people to enroll. The math makes sense when you
think about it: if paying someone a $2,000 “stipend” gets the college
$20,000/year in tuition courtesy of the federal government, that’s money
well spent. Unfortunately, many people who accept such “stipend” offers
never graduate, become overwhelmed with student debt, and destroy
their already bad financial records.

Wow! That was eye opening.

[Jonyak]

Originally Posted by elgecko

I paid up front and graduated without owing anyone a cent.

I'd highly recommend the same for any current/future college student if they can. I'd also recommend against any credit card debt you can't pay off in 1-2 months.

Good for you, but not everyone has or can have 15-40k just sitting around.

[hover]

Originally Posted by Jonyak

Good for you, but not everyone has or can have 15-40k just sitting around.

Right? I mean it never occurred to me to save every cent I've earned since my conception for just this.

[spade2you]

Originally Posted by elgecko

I paid up front and graduated without owing anyone a cent.

I'd highly recommend the same for any current/future college student if they can. I'd also recommend against any credit card debt you can't pay off in 1-2 months.

I was lucky enough to have scholarships and help from my parents as well as a job, but college tuition is going nutz! My dad was able to put himself though Creighton working as a pharmacy student. Given my jobs prior to being a pharmacist, not quite possible to pay one's way through a college like that. Even the local state school would have been a challenge to support myself without any additional funding.

I would agree that the college experience generally glorifies wasting a lot of money. I knew plenty of people who would take out the max every year and be traveling to exotic places for every spring and fall break.

[Mr. Pickles]

I got nailed in college by creditors. One day I went to the ATM on campus and saw an application for the Discover card with a slogan that claimed all college students were automatically approved. There was a whole wall filled with similar credit card applications. I did not have good money skills, and racked up about $6,000 in credit debt over the next four years, none of which I could pay off as I wasn't eligible for a job on campus (I didn't own a car at the time).
Let my story be a cautionary tale

[KarateKid25]

Originally Posted by Jonyak

Good for you, but not everyone has or can have 15-40k just sitting around.

You don't need to have that kind of money sitting around. I pay unit by unit. Not everyone can manage this, fair enough, but you don't need the entire fee up front (unless you guys do things completely different over there?).

[McHaven]

Originally Posted by KarateKid25

You don't need to have that kind of money sitting around. I pay unit by unit. Not everyone can manage this, fair enough, but you don't need the entire fee up front (unless you guys do things completely different over there?).

I pay in installments at my school. I haven't been able to save enough to pay entirely on my own, but I cover my own rent, food, gas, etc, while the parents pick up tuition.