Many Maryland college students end up with thousands of dollars in plastic debt because schools often fail to protect them from aggressive on-campus marketing by credit card companies, two consumer groups said yesterday.
The Maryland Consumer Rights Coalition and Maryland Public Interest Research Group surveyed a dozen four-year public colleges and universities in Maryland about credit card marketing on campuses.
"What we found are lax policies on many campuses. In some cases, they don't even follow the policies they have on the books," said Brad Heavner, director of MaryPIRG.
The groups blame credit card debt for the rise in bankruptcies among young adults. The average card balance among undergraduates in 2001 was $2,327, according to a survey by Nellie Mae, a student loan provider. "There are so many students that end up getting in over their head," said Cheryl Hystad, executive director of the consumer coalition. "You hate to see someone starting their life already in the hole."
The groups' report, "Graduating Into Debt," reveals a wide variation in how schools deal with card marketers.
Four schools - Bowie State University, Coppin State College, University of Maryland, Baltimore County and University of Maryland Eastern Shore - prohibit credit-card marketing on campus.
The others allowed some degree of marketing, such as inserting card applications in bookstore bags, letting card vendors set up tables on campus or offering alumni affinity cards.
Two schools, Towson University and Salisbury University, sell students' names, addresses and phone numbers, the consumer groups said.
Towson supplies a list of students and alumni to MBNA, the giant card issuer. That contract will come up for bid in the summer, and student information won't be included next time, said Lori Armstrong, executive director of the alumni association. Armstrong wouldn't say how much the association collects under the deal, but said the money went toward student scholarships, faculty grants and building projects.
Salisbury sells its list to groups such as the military, graduate schools or car dealerships, but not to credit card companies, said Carol Williamson, vice president of student affairs.
The school's policy also permits card vendors to set up a table on campus to provide information, but they cannot accept applications, Williamson said. The fee to come on campus is high enough to dissuade card vendors from doing so, she said.
University of Maryland, College Park allows the marketing of an alumni association affinity card at sporting events, but the school's policy prohibits card solicitations anywhere else on campus, the consumer groups said. Nevertheless, the groups said, students report they see card vendors setting up tables outside dining halls and at other campus sites. While some vendors make unauthorized campus visits, the school has been enforcing its policy and the number of violators has dropped, said Cassandra Robinson, a university spokeswoman.
The consumer groups' recommendations to colleges and universities include:
Develop written policies, with the help of students and parents, on card marketing on campus.
Prohibit the sale of student lists to businesses.
Provide credit card education during freshman orientation, which some schools already do.
Credit card campus
According to a 2001 Nellie Mae survey of undergraduates:
Eighty-three percent have at least one credit card.
The average credit card balance is $2,327.
Twenty-one percent with cards have balances of $3,000 to $7,000.
Graduating students have an average of $20,402 in loans and card debt.