Universities Can Sell Alumni Info to Credit Card Companies
Affinity Agreements Still a Moneymaker for Higher Education
A common moneymaker in collegiate circles is the sale of alumni and students’ information through the use of affinity agreements. Many believed that the passage of the Credit Card Accountability Responsibility and Disclosure Act of 2009 would curtail these business practices, but a clause allows these credit card programs to continue provided they disclose their dealings. The act does not cover other industries. The question many parents and students are asking is “Can the school sell my personal information?” The answer is yes and it is still legal.
In higher education, affinity agreements have become an excellent way to make money and many companies take advantage these programs. They provide car rental discounts, mobile communication packages, campus Internet access and even vending machine displays. Companies encourage students to sign up for special offers or services and the university financially benefits.
The Credit Card Accountability Responsibility and Disclosure Act of 2009 brought the use of these programs to the public’s attention, but it does not abolish the practice. It only limits banking affinity agreements and protects students until graduation. Pennsylvania Congressman Patrick J. Murphy (D-8th District) has proposed additional disclosure measures focusing on financial institutions. It is unclear as to whether Murphy supports abolishing the practice of all affinity agreements.
Under the Credit Card Accountability Responsibility and Disclosure Act of 2009, colleges and universities must publicly disclose their marketing relationships with credit agencies but it does not restrict the college or university from providing the names of alumni for marketing purposes. Credit card agencies must now submit an annual report containing full disclosure of their dealings on campus. The report includes all business, marketing, promotional agreements and an account of all credit cards issued to both student and alumni.
J.P Morgan Chase, Citigroup, Wachovia, Wells Fargo and Bank of America have signed affinity agreements with many universities and colleges. The media tends to focus on Bank of America since it has been the most forthcoming in the publishing the extent of their affinity agreements. According to a November 30, 2009 press release, the bank has 800 collegiate endorsements including 70 percent of the schools in the Big 10, Big East and Pac-10 athletic conferences and five of the eight Ivy League schools. The question alumni must ask is how are these revenues from banks and other companies used to benefit students. The 2009 the Credit Card Act did not require this disclosure.
