OUR VIEW: OU selling students out
Published: February 8, 2011
OU has made an incredible amount of money with its credit card affinity agreement with Bank of America and Mid-First Bank, but at what cost to students?
Since the agreement took effect May 1, 2007, the university has made $8.8 million by releasing student contact information to banks. OU makes commission and royalties on all purchases made on the cards and when the bank acquires new members.
The original idea was to put that money toward student activities. Unless constructing and acquiring majestic buildings is a form of student activities, then the university has not stuck with the original terms of the agreement.
The money made off of this deal has not gone toward student activities. Rather, the bulk of it has gone to the Fred Jones Junior Museum of Art, which received $6 million from the agreement in the last year alone.
The Arezzo Monastery in Italy that OU purchased for a study-abroad program has received the second-biggest chunk of change from the agreement — $445,595. While that’s a far cry from $6 million, it’s still a significant amount.
And then there’s the nebulous “Other Institutional Commitments,” which university spokesman Chris Shilling refused to disclose, receiving $691,980.
While it generates millions of dollars — OU was guaranteed $12.1 million over 10 years, according to the terms of the agreement — it comes at an overlooked cost to students.
Many students receiving credit cards don’t know how to use them, and the OU administration only pays lip service to making sure its students will use the cards wisely.
Shilling said the university offers students educational outlets to help prevent credit-card abuse and poor money management.
This is news to us. Just what does OU offer in terms of financial literacy for students? The most significant offering we could find doing a simple search of “financial literacy” on search.ou.edu is an OU high school course called Personal Financial Literacy. However, this no longer exists seeing as the administration decided to quietly discontinue its OU high school courses this year.
Learning how to use credit cards and build credit can be beneficial for students, but the university needs to do its part to offer students programs or courses in this area. If there are financial literacy programs on campus, they need to be advertised. Right now, it seems like the administration could care less.
Allowing banks to target students can have serious consequences. In 1988 and 1997 two Oklahoma students committed suicide because of the crushing credit-card debt they acquired. While this happened before OU made its affinity agreement, many have pointed to these deaths as reasons why OU should be more transparent about its agreement, modify it or get rid of it completely.
More recently, student credit-card debt has increased. On average, students leave college with $3,000 in credit card debt, according to an April 2009 report by student loan provider Sallie Mae. That’s a 41-percent increase from 2004, according to the report, and this doesn’t even count debts accrued from student loans.
Students should be expected to take responsibility for their own actions, but the problem has grown to a point that the university must do more to protect the student’s interests. The administration should start by being more honest and transparent about its affinity agreement.
Right now, the agreement is hidden away. There is no mention of it on the OU website in its policy regarding the release of student information.
To keep their information from being released, students have to go through the trouble of filling out a request to withhold their information, an action that has strings attached as well. The university will release no information “verifying your attendance, withdrawal or graduation from the University” unless a student consents with a written request. So if there’s any benefit to allowing the university to release your information, you must acquiesce to allowing it to provide your information to the banks.
OU also makes sure to place the interests of the bank above students, as outlined in the agreement. If an open-records request is filed regarding the agreement, the contract states that the university will consult with the bank “on the advisability of taking legally available steps to resist or narrow” such requests. Why would OU try to block out open-records requests on the affinity agreement unless it knew how deceitful it really is?
If students knew how the university allows banks to target naive students with credit-card opportunities, people would likely call for change. But OU uses every loophole in the book to make sure students remain unaware so that its lucrative program can remain in place.
The student who killed herself in 1997 was Mitzi Pool, an 18-year-old freshman at the University of Central Oklahoma. She was found dead in her dorm room with credit card bills covering her bed.
To make sure this didn’t happen again, UCO banned banks from marketing credit cards on its campus and incorporated several sections of a personal-finance course into its general-education requirements.
While we don’t think banks ought to be completely banned from soliciting to students on campus, OU should be honest about its agreement and make it easier for students to withhold their contact information from being given to banks.
And the administration should definitely take a leaf out of UCO’s book and get serious about providing financial literacy courses to students. As suggested by the millions raised from the agreement, it’s not like OU couldn’t afford it.
Comments
sam 1 year ago
I think it is great that The Daily has informed students about these agreements. I think it is too bad that they leaned toward tabloid journalism to try to create and prove a point, when the story stood without it. It is one thing to show how OU is selling student information to credit card companies and further explain how that money is being allocated. We deserve to know that kind of thing. And the Daily should be commended for keeping OU accountable for that kind of thing. It is quite another to say that OU is maliciously and negligently not providing financial education after exposing students to credit card solicitation and then wind in two very tragic deaths.
I am betting that if a student is seeking financial information from the University they hardly ever search "financial literacy."
However if you search "financial education" "budget help" "credit card debt" or even "money help," there are a number of resources OU provides including Financial Aid, Career Services and even a whole Financial Education office.
Brooks 1 year ago
I would agree that The Daily is correct in shining light on University financial agreements. Transparency is usually helpful for enlightened discussion, especially inside a public institution.
Additionally, particular to this topic, many new things are on the table with regard to financial institutions marketing credit cards to young adults. Federal legislation will require additional steps before a 20-year old can obtain a credit card, which is a great topic for debate in its own right. OU counsel, if they haven't already, will need to reassess the initial relationship and monitor implementation to make sure their business partners follow the new federal legislation closely.
Regarding financial literacy education, I would encourage students and Administrators alike to view JumpStart Coalition's web site, www.jumpstart.org, to find many helpful resources and read through some of the nationwide research. Financial illiteracy has become an epidemic. The good news is that a plethora of helpful resources are available, many creative and innovative. Along with 3D animated curriculum like ours geared toward young adults, there are books, power point presentations, mini-courses, topical applications, podcasts, etc. which assist students in becoming financially literate. Quality curriculum/information is available.
If not through formal institutional channels, students should seek out informal educational sources which will help them become better personal financial managers. The information is out there in various media thanks to the internet and Web 2.0 technologies. I would encourage all students to be proactive in finding content delivered via their preferred medium and get started early. Personal financial management is an important discipline which has long-term implications for individuals, families, and society as a whole.
Brooks Levonitis, CEO Thespis Media, Ltd. Co.
Dg80809 1 year ago
Financial literacy is a matter for the individual to learn, not for the University to impose. The vast majority of OU students are 18 or older, and therefore have the rights and responsibilities of an adult. Whenever someone of age uses a credit card, they are agreeing to a contract made with the credit card company. No one at OU or at the credit card company is holding a gun to someones head, forcing them to use the card. There were a few things that the author neglected to mention:
It seems to me that financial literacy should be something that is learned WAY BEFORE someone walks onto campus for the first time.
dawsonfresh 1 year ago
"Financial literacy is a matter for the individual to learn, not for the University to impose." So, people ignorant how of credit cards work because no one ever taught/showed them the importance are left to figure this out alone? You're not your brother's keeper, I imagine.
His willingness to pay extra fees/tuition to cover whatever amount of money OU loses by declining those kinds of income. -- Pay extra fees for elective expansions of the art museum and additions to study abroad? No money and these most likely wouldn't have happened, simply.
MidFirst offers a Debit card with the OU logo. I wonder how much of that 8.6 million comes from Debit Cards... -- yeah, maybe it is only 5 or 6 mill, good point...
It seems to me that financial literacy should be something that is learned WAY BEFORE someone walks onto campus for the first time. -- but WHAT IF IT ISN'T learned before getting on campus? You just say tough **** to them and let them figure it out the hard way?
You also didn't even touch on the Univ failure to uphold their commitment to using the revenue for student activities. Sounds like you'd love to push individuals to garner responsibility for their ignorance on credit cards with some bootstraps mentality while giving the big organization side a slide. More outraged over 18 year old kids ignorant of how credit multiplies issues for them than the organization that made off with millions without fulfilling commitments, that's ridiculous.
iGrad 1 year ago
It's great that someone is addressing this issue. While it is unfortunate that many schools haven't been very proactive with their financial literacy initiatives, the good news that state and federal programs may be making this mandatory soon. Texas has made financial literacy mandatory for all of its schools, and New York has made it mandatory for its state schools. It seems that other states may be following suit soon...that is, if the Department of Education doesn't step in and mandate financial literacy training for all colleges across the nation. For more news and resources regarding financial literacy, check out www.iGrad.com>
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Ducky 1 year ago
This is a very informative article. This is the kind of thing that actually impacts the lives of people and that we need to know about.
It is impressive what you guys can accomplish when you're not wasting space with articles about homosexuality, abortion, guns, and the existence vs. non-existence of God.
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