And Michigan State is far from the only university to engage in this nefarious practice. I don’t know exactly what my own school’s practices are in this regard, but I’ve certainly seen credit card solicitations happening on campus. It’s sad and disturbing to think about colleges taking advantage of students in this way, while simultaneously raising tuition every year. In September commercial law expert Elizabeth Warren wrote at the Credit Slips blog:
I connect the the dots this way: First, the projected defaults for AmEx suggest that trouble is climbing the income ladder. Second, the projected defaults suggest that the economic news is going to get uglier in 2009. And, third, the credit card issuers’ plan to avoid complete collapse is to find more people to borrow money, presumably at prices high enough to offset the losses. And all three dots suggest the plan won’t work.
Credit card companies will often pressure parents to pay off the balances that their student children accumulate on university facilitated credit cards, often without their knowledge. They aggressively inform the parents that their children will face bleak futures if their credit ratings are poor, because they will be unable to buy cars, or rent apartments, or even to obtain employment because some employers run credit checks on prospective employees. I couldn’t do my job without a credit card. Hotels will not even make reservations for someone who does not have a credit card. When I travel for work, or to host people visiting the law school for professional reasons, I am usually required to front all expenses, and then wait to be reimbursed, which sometimes takes months. I think this phenomena is true for a lot of people, and the credit card companies energetically exploit it.