Florida Attorney General Bill McCollum is right to be asking questions about the unholy alliance between credit card companies and some state universities. Any time a public institution is granting market exclusivity in exchange for millions of dollars, the deal deserves scrutiny.
The relationships are, on their face, troubling. Universities are supposed to teach students to be responsible with their personal finances, but Florida State University and the University of South Florida are among the institutions that are letting banks use the university logo as a lure to both current and former students.
These are big-money deals. Bank of America will pay FSU's Seminole Boosters $10.7-million over seven years and USF's alumni association at least $4.1-million over the same period. The University of Florida has its own $10-million deal with Chase Bank, though it at least had the sense to prohibit direct marketing to students.
USF alumni director John Harper defends the practice, in part, by noting that students are deluged with credit card offers anyway. That's true, but the reason banks are willing to pay top dollar for a university logo credit card is they know it works. The logo also carries with it an undeniable stamp of university approval.
As Consumer Warning Network founder Terry Smiljanich told the Times: "Universities should not be in the role of encouraging students to run up debt so colleges could make money. That seems totally contrary to what a university should be."
For credit card companies to treat college students like easy prey is a disturbing enough statement about corporate America. But when universities themselves become part of the solicitation, they are treating their students like a form of collateral. That's indecent.
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