Colleges sell information to credit card companies

Jennifer Knight

Wednesday, Dec. 26, 2001 | 10:04 a.m.

It was a given that the Community College of Southern Nevada would make money off of Denise Wilcox, 48, when she signed up for a creative writing course, but she never realized they would profit from her name.

At least three of the state's higher learning institutions have partnered with credit card companies, and they turn over thousands of student names, addresses and phone numbers to the firms. In exchange the school receives a slice of the profits on all student credit card purchases.

"I was so incensed by this," Wilcox said. "Here we have a taxpayer- funded organization that gives the names of students to corporations who come up with witty ads to entice them to get into debt. That's wrong."

Traditionally institutions have marketed mostly to alumni, but undergraduate students are making their way onto lists.

"I don't like that at all. Undergraduates? That disturbs me," Regent Howard Rosenberg said. "I don't think anyone knows that this is going on."

At the University of Nevada, Las Vegas, a partnership with MNBA credit generates $100,000 a year for the student alumni center. The student list includes 47,000 alumni, but the center also gathers a list of new students each semester to send them one-time solicitations, said Fred Albrecht, vice president for university, community and alumni relations.

"We're a nonprofit organization, and we need things like this to generate money to pay for homecomings, tailgate parties and scholarships that we provide the students," Albrecht said.

The University of Nevada, Reno Foundation has a similar deal with the same credit card company. Its resulting profits from both alumni and undergraduate students in 2000 were $50,000 a year, according to Bob Gabrielli, development director for UNR's university foundation.

CCSN was unable to provide a dollar figure for its student credit card profits, but it participates in similar programs, Patty Charlton, the interim vice president of finance and administration, said.

Members of the Board of Regents will discuss during their next meeting whether it is a good idea to sell personal information, especially to undergraduates, who could begin building up credit card debt before building a career. The board will meet Jan. 24-25.

"I don't like that," Regent Dorothy Gallagher said. "I do know an awful lot of these students are getting into credit card debt. I'd be so furious if one of my boys was down there running up credit card debt without my knowledge."

The university system is still investigating the legality of releasing student information and whether students are asked for their consent, Dan Miles, vice chancellor of Nevada's university system, said. That answer will be presented to regents at the meeting.

Debt among college students has steadily increased over the years, partly because of easier access to credit, studies say.

According to a study done in 2000 by Nellie Mae, a student loan provider, 78 percent of undergraduates own credit cards. That number is up from 67 percent two years ago.

Years ago lenders required students to have an adult co-sign for a credit card. Lenders have since lifted that requirement, making access easier, the Nellie Mae study said.

The average debt of students ranges from $1,000 to $2,700, according to a 2001 study completed by the U.S. General Accounting Office.

Wilcox was upset by the credit card solicitation she received, because it appeared to goad students into signing up by saying, "Show school pride and buy cool stuff," she said.

Wilcox should know about student debt. Her 23-year-old daughter succumbed to advertisements and "will be paying off the balance on her credit card for a long, long time," she said.