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Economy
In reply to the discussion: STOCK MARKET WATCH -- Friday, 1 June 2012 [View all]Demeter
(85,373 posts)22. On Campus, New Deals With Banks
http://www.nytimes.com/2012/05/31/business/on-campus-new-deals-with-banks.html?hpw
College campuses have long been attractive hunting grounds for financial institutions looking for new customers. In recent years, however, their efforts to woo students have gotten banks and other financial institutions in trouble with regulators. They are now effectively prohibited from providing gifts to students who sign up for credit cards. And the colleges themselves can no longer be paid by the lenders to steer students to student loans. But many colleges, struggling to offset cuts in state funds and under pressure to keep tuition down, are finding new ways to strike deals with financial institutions, by turning student IDs into debit cards and allowing lenders to take over disbursement of financial aid. Consumer advocates worry that financial firms are again profiting from unsuspecting students, by charging them fees and even gaining access to their financial aid funds. Now a prominent consumer group has tried to document the extent of the practice.
In a report released on Wednesday, the group, the United States Public Interest Research Group Education Fund, found that nearly 900 colleges and universities have card partnerships with financial institutions; in some instances, the colleges receive hefty payments from banks for the exclusive access to students; in other instances, the schools save money by outsourcing financial functions to banks or other vendors. The participating schools include many of the nations best-known universities and represent two out of every five college students, the report says. The list includes big public universities like the University of Florida and University of Michigan and private schools like the University of Pennsylvania and Northwestern.
Since the financial institutions logo is often stamped on campus IDs, students may sign up for an account because they believe the university has endorsed the product, the report says. In some instances, students have to open an account if they want to obtain their funds quickly...
College campuses have long been attractive hunting grounds for financial institutions looking for new customers. In recent years, however, their efforts to woo students have gotten banks and other financial institutions in trouble with regulators. They are now effectively prohibited from providing gifts to students who sign up for credit cards. And the colleges themselves can no longer be paid by the lenders to steer students to student loans. But many colleges, struggling to offset cuts in state funds and under pressure to keep tuition down, are finding new ways to strike deals with financial institutions, by turning student IDs into debit cards and allowing lenders to take over disbursement of financial aid. Consumer advocates worry that financial firms are again profiting from unsuspecting students, by charging them fees and even gaining access to their financial aid funds. Now a prominent consumer group has tried to document the extent of the practice.
In a report released on Wednesday, the group, the United States Public Interest Research Group Education Fund, found that nearly 900 colleges and universities have card partnerships with financial institutions; in some instances, the colleges receive hefty payments from banks for the exclusive access to students; in other instances, the schools save money by outsourcing financial functions to banks or other vendors. The participating schools include many of the nations best-known universities and represent two out of every five college students, the report says. The list includes big public universities like the University of Florida and University of Michigan and private schools like the University of Pennsylvania and Northwestern.
Since the financial institutions logo is often stamped on campus IDs, students may sign up for an account because they believe the university has endorsed the product, the report says. In some instances, students have to open an account if they want to obtain their funds quickly...
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Jun 2012
#116