Editor's Note: This is the second in a two-part series that examines credit cards and student debt at both a national level and at Dartmouth.
As more and more college students across the country take out credit cards each year, some colleges have tried to cash in on this trend by striking deals with card issuers. These contracts give credit card companies exclusive rights to market on their campus or at specific athletic events.
Colleges can earn millions of dollars every year by granting companies exclusive access to their students.
The University of Tennessee in Knoxville will earn $10 million over seven years in exchange for allowing Chase access to its student athletic events and Bank of America has over 700 deals with colleges and alumni associations across the country.
But so far credit card solicitation at Dartmouth has remained confined to the United States mail. The Hinman Post Office is obligated to put any piece of mail that comes through the U.S. mail into student boxes. The College does sponsor a Dartmouth Mastercard or Visa for students and alumni that bears the picture of Dartmouth Hall in the winter. A percentage of every transaction made with the card goes to Dartmouth, with some funds directed to the Alumni Affairs office.
"The credit card company does pay the College a royalty. I am not at liberty to disclose the terms, but it is a respectable sum. In addition, they pay for an intern to work in the Alumni Office and provide a set amount per year to be used for programming," Deputy Director of Alumni Relations Peggy Parsons said.
"They also offer student internships at their office during the summer."
Despite this financial advantage, the Alumni Association said that it does not aggressively market its cards to students.
"During the negotiations with the credit card company, the College was particularly concerned that every precaution be taken to ensure that students understood the risks of running up irresponsible debt," Parsons said.
"Dartmouth was one of the last of the Ivy League schools to offer a credit card."
The Alumni Association is also adamant that it does not sell Dartmouth's mailing list to any credit card company that asks.
"I can absolutely guarantee you that we never sell them out or lend them out," Parson said.
However, the Alumni Association does allow Bank of America to access both student and alumni home and school addresses for the purpose of selling the credit card it sponsors.
"It is carefully written out that we provide [the credit card company] the mailing list for one time use only. We get to approve the piece of mail they are sending before we even provide the list," Parsons said.
"Each time they destroy the mailing list and they have to request a new list every time."
The problem of student credit card debt has attracted the attention of state governments in recent years.
In 2000, the New Hampshire House attempted to pass a bill that would create a committee to investigate student debt. The committee would then make recommendations about possible regulations for credit card companies on college campuses.
"We were particularly interested in the marketing of credit [cards] to college freshmen, especially during orientation. I had investigated the problem of college debt which includes credit cards and college loans," said Mary Stuart-Gile, who is a member of the New Hampshire House and the bill's primary sponsor.
"I found that this debt is overwhelming for young people who are just starting out after getting their degree."
But after just one hearing before the Commerce Committee the bill "died an early death," Stuart-Gile said.
"There just wasn't enough interest at the time to pass the bill. The average age of a member of a New Hampshire state legislator is 67. Many of them are beyond the time of being worried about credit cards," Stuart-Gile said.
"The young members tend to be those that don't have to worry about finances. They did not feel student debt and its effect on the future economy of New Hampshire was significant enough."
After the bill's failure, other members of the assembly proposed bills that would look into financial literacy education, especially at the high school level.
This would prevent students from entering college with no idea of what they were getting themselves into, Stuart-Gile said.
She noted that the problem of student debt may not be as apparent on the Dartmouth campus due to the College's strong financial aid program.
In addition, many students also feel that Dartmouth students often have more of a financial cushion than students at other universities.
"I feel like I don't see as much here because a lot of people who get into that trouble have their parents to pay it off for them. I know we're not all super rich, but it just seems like parents help out a lot more here then at a lot of places," Gianna Chavannes '07 said.
Correction Appended
For the Record: An article on Wednesday ("On-campus card offers raise questions," Oct. 11) misstated that the Alumni Association sponsors a MasterCard or Visa and that the Association receives a percentage of the royalties from each transaction. It is the College, instead, that sponsors the card and receives the royalties.
