Banks Pay Colleges for Students’ Names, Addresses

Flickr/ <a href="http://www.flickr.com/photos/publicdomainphotos/4259455424/">Photos8</a> (Creative Commons)

For indispensable reporting on the coronavirus crisis, the election, and more, subscribe to the Mother Jones Daily newsletter.


Landmark credit-card legislation signed into law last year halted some of the predatory tactics used by banks to attract student borrowers, but the new law hasn’t stopped colleges from preying on their own students. Some of the nation’s largest universities are selling students’ names and addresses to credit-card companies for millions in kickbacks from big, bailed-out financial giants like Bank of America and J.P. Morgan Chase, the Huffington Post Investigative Fund reports.

Through inconspicuous collegiate-corporate relationships known as “affinity agreements,” schools and their alumni associations not only profit from selling students’ personal information, they also earn royalties for each student who keeps a university-sponsored credit card open for more than 90 days. Schools can earn up to three times more—about $3 per cardholder—when students carry a balance on these cards, and some colleges earn bonuses when students incur debt.

The Huffington Post obtained 17 contracts detailing affinity agreements between universities and banks, but it’s unclear just how many of the nation’s 2,700 four-year colleges are involved. At Brown, Bank of America agreed in 2006 to pay $2.3 million over seven years for students’ names and addresses. At Michigan in 2003, the bank agreed to pay $35.5 million over 11 years for its student information. In total, BOA has affinity contracts with some 700 schools, and more than 100 schools are believed to have affinity agreements with other financial institutions, according to the Huffington Post.

Bank of America claims it’s not taking advantage of students; rather, it’s amassing a new base of loyal customers. But consumer advocates beg to differ, questioning whether colleges with affinity agreements are doing enough to safeguard young people from financial ruin. “Universities should place the welfare of their students as their highest priority,” said Ed Mierzwinski, consumer program director for the federation of state Public Interest Research Groups. “[They] shouldn’t sell them off for profit.”

FACT:

Mother Jones was founded as a nonprofit in 1976 because we knew corporations and the wealthy wouldn't fund the type of hard-hitting journalism we set out to do.

Today, reader support makes up about two-thirds of our budget, allows us to dig deep on stories that matter, and lets us keep our reporting free for everyone. If you value what you get from Mother Jones, please join us with a tax-deductible donation today so we can keep on doing the type of journalism 2020 demands.

FACT:

Mother Jones was founded as a nonprofit in 1976 because we knew corporations and the wealthy wouldn't fund the type of hard-hitting journalism we set out to do.

Today, reader support makes up about two-thirds of our budget, allows us to dig deep on stories that matter, and lets us keep our reporting free for everyone. If you value what you get from Mother Jones, please join us with a tax-deductible donation today so we can keep on doing the type of journalism 2020 demands.

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate