Officials from Iowa’s three public universities are defending deals which allow companies to market their credit cards to students. Iowa, Iowa State and UNI have agreements with Bank of America to market university-branded credit cards to alums, but Iowa and Iowa State also target students.
Iowa State University Alumni Association president Jeffrey Johnson says most students can’t get buy in today’s world without a credit card. "If our students are going to do normal society, adult-related purchases or transactions, they have to have some form of credit," he says. Doug True — a University of Iowa senior vice president, says the exclusive contract actually reduces the number of credit card solicitations aimed at students while they’re on campus.
"One of the effects of having a single provider….there weren’t a multitude of (companies) soliciting students at the union," he says. However, the 10-year deal with Bank of America does not prevent other credit card companies from marketing their cards to students through the mail or at off-campus locations in Iowa City and Ames.
Some students have complained about the universities giving their addresses to credit card companies, but True says it’s public information that can be purchased by any company. True and Johnson appeared Tuesday before a legislative committee studying the issue.
Representative Jodi Tymeson, a Republican from Winterset, says it appears the bigger financial issue for students is loans to pay for college tuition rather than the debt they’re racking up on credit cards.
"The aggressive marketing of credit cards to students is not as big a problem as we thought," Tymeson says. "Certainly, I would encourage parents to talk to their children about the fact that they’re going to be receiving all these offers and that there is a cost with a credit card. It isn’t easy money. It isn’t free money."
According to records from the University of Iowa and Iowa State, fewer than 600 students have signed up to carry the Bank of America cards, and the average balance on one of those cards is $1,100. The school officials cited other statistics indicating the average student at Iowa and Iowa State is carrying about $23,000 in student loan debt.