The New York Times on Thursday reported on a contract between Michigan State University and Bank of America that may help push college students into getting and using credit cards:
Bank of America’s relationship with the university extends well beyond marketing at sports events. The bank has an $8.4 million, seven-year contract with Michigan State giving it access to students’ names and addresses and use of the university’s logo. The more students who take the banks’ credit cards, the more money the university gets. Under certain circumstances, Michigan State even stands to receive more money if students carry a balance on these cards.
Hundreds of colleges have contracts with lenders. But at a time of rising concern about student debt — and overall consumer debt — the arrangements have sounded alarm bells, and some student groups are starting to push back.
The State News, MSU’s student newspaper, reacts to the report, saying, “What is more questionable is giving MSU an incentive to encourage wild spending on credit cards. It doesn’t take a giant leap for someone to ask why the university should encourage responsible spending when it receives a cut of every purchase.”