Jane in NC Posted January 1, 2009 Share Posted January 1, 2009 I thought that the article entitled The Debt Trap from yesterday's New York Times on how universities profit by selling their student lists to banks that issue credit cards was interesting. While one could argue that the universities are not exactly promoting consumer debt amongst their student population, the schools are certainly benefitting from the use of affiliated cards. When I was in graduate school, it seemed that credit card applications arrived in the mail almost daily. I never got into trouble but I have met students who have viewed a credit limit as a checking account balance. Whether you feel this is a reasonable business practice or not, I suppose this is another thing on which our students need to be forewarned. Jane Quote Link to comment Share on other sites More sharing options...
Michelle in MO Posted January 1, 2009 Share Posted January 1, 2009 I guess I can see some pros and cons regarding this practice. On the one hand, I suppose students need to start establishing some type of credit for themselves. I had very little credit history, as I had no student loans (this was, of course, back in the days when college was much more affordable than now). The only loan I had was for my 1982 Chevette, which my parents co-signed for through their credit union. I managed to survive without a credit card during those college years partly because I had seen others get into trouble with credit card debt and so I managed to somehow get by without a credit card at all. On the other hand, though, these credit applications might be hitting some students at a fairly vulnerable time in their young lives. They're fresh out of college (or perhaps still in college); most have little money, and only part-time jobs which don't pay very much, plus many of them owe money on their student loans. Sometimes that vulnerability, combined with a seemingly easy opportunity, can make for financial chaos! I think the time to begin teaching these lessons to our kids (and I know you already do, Jane) is before they enter college, by teaching them good money-management skills. One thing I'm thankful for at the school our girls are attending is that the school (and the state of Missouri, as well) requires a class in personal finance prior to graduation. I don't think one has to have a class, per se, on the subject while homeschooling, because with homeschooling so much instruction just comes naturally, through daily interaction and instruction. I'm thankful the school requires it, and all three girls will have to take this class, which will instruct the kids on topics like student loans, credit cards, checking accounts, interest rates on loans (student, car, home mortgage, etc.). I'm very glad they'll be getting some detailed instruction on money management! Whether schools should be selling these student lists is another thing. It does make me wonder---shouldn't there be some level of personal privacy? Can a student "opt out" of some of these things? It would get annoying, receiving credit card applications in the mail all the time. Just my .02 worth for today! Quote Link to comment Share on other sites More sharing options...
Jane in NC Posted January 1, 2009 Author Share Posted January 1, 2009 One thing I'm thankful for at the school our girls are attending is that the school (and the state of Missouri, as well) requires a class in personal finance prior to graduation. How interesting, Michelle. Do you know what topics are covered within the finance class? When I taught liberal arts math classes and showed kids how much their house or car will actually cost when the interest is factored in, it always blew them away! One of the problems, it seems, when talking to teens about money is that $1000 can seem like a lot. They often don't realize how much is required to maintain a household on a monthly basis. This is not reason to ignore the subject, of course. With the rising cost of college tuition, text books, etc., it seems that teens need to be plugged into reality earlier than later. It is one thing, however, to present the information; another for them to process it! Jane Quote Link to comment Share on other sites More sharing options...
Gwen in VA Posted January 1, 2009 Share Posted January 1, 2009 Funny thing -- We want our kids to have a credit card of their own early on in their college career so they can start building up a credit history. Ds and dd both took classes at a 4-year state college prior to graduation and then went to the same LAC, just twelve months apart. So they should have received the same credit card offers, right? Dd received NO credit card offers, ever. Ds receives them almost daily. Huh? So ds (younger) got a credit card within a few weeks of going off to college; dd (older) is now (as a sophomore) applying for a credit card using one of the applications that came for ds in the mail! I think SELLING info to credit card companies is awful, but dd certainly found it inconvenient to NOT have any credit card offers come her way! Quote Link to comment Share on other sites More sharing options...
Michelle in MO Posted January 1, 2009 Share Posted January 1, 2009 How interesting, Michelle. Do you know what topics are covered within the finance class? When I taught liberal arts math classes and showed kids how much their house or car will actually cost when the interest is factored in, it always blew them away! One of the problems, it seems, when talking to teens about money is that $1000 can seem like a lot. They often don't realize how much is required to maintain a household on a monthly basis. This is not reason to ignore the subject, of course. With the rising cost of college tuition, text books, etc., it seems that teens need to be plugged into reality earlier than later. It is one thing, however, to present the information; another for them to process it! Jane middle school math, and she showed her kids some of the same calculations regarding the interest rates on car loans and especially on 30-year home mortgage loans. This friend exercised great self-discipline in her own personal finances: she paid off her 15-year home mortagage loan in half the time by making double house payments. I don't know the total scope and sequence of the class, but I was told by the high school counselor that it covers topics like: credit cards (how to use them, how not to use them, their interest rates, etc.), student loans and the interest rates associated with those loans, other forms of monies available for paying college tuition (very handy information there!), car loans and interest rates, home mortage loans and interest rates (both of the latter probably presented very much the same way you did in your math classes), drawing up a monthly budget, etc. I think you're right on: students need this information sooner rather than later, which is probably why it's now a required course for all public high schools. The girls' school is private, so they're not necessarily subject to the same state requirements, but they require it for graduation. I think it's an excellent idea! Whether students learn to process the information and gain thereby is another matter altogether, which is where good parenting can hopefully help kids learn to manage money wisely, especially before they go off to college! Quote Link to comment Share on other sites More sharing options...
Sandra in NC Posted January 1, 2009 Share Posted January 1, 2009 "Maxed Out" is a documentary with heart-wrenching stories about college kids and credit cards. One student, a National Merit scholar, signed up for multiple cards -- initially just to get the freebie t-shirts and other incentives offered by the credit card companies. He committed suicide after running up huge balances on the cards. Another mother has a similar story about her daughter. The parents question why the credit card companies extended so much credit to students who had only part time jobs. Quote Link to comment Share on other sites More sharing options...
Murphy101 Posted January 1, 2009 Share Posted January 1, 2009 I think that the students should be able to opt out of any and all private information being given/sold for non-academic purposes such as credit cards. If the kids want credit, it's simple enough to go apply for it and they are more likely to compare and get a better deal that way. Otherwise I think their finances and other such records should be private. But then again, I'm a die-hard anti-credit card and loans person. I would not encourage my kids to get any debt for a non-essential. Not even for college. Quote Link to comment Share on other sites More sharing options...
Gwen in VA Posted January 2, 2009 Share Posted January 2, 2009 We use credit cards but pay at the end of the month. Period. Credit cards are useful -- without them you would need to carry lots of cash all the time. And how can you make a reservation at a hotel without a credit card these days? Using a credit card does not necessarily entail any debt at all. Period. Quote Link to comment Share on other sites More sharing options...
Michelle in MO Posted January 2, 2009 Share Posted January 2, 2009 I think that the students should be able to opt out of any and all private information being given/sold for non-academic purposes such as credit cards. If the kids want credit, it's simple enough to go apply for it and they are more likely to compare and get a better deal that way. Otherwise I think their finances and other such records should be private. But then again, I'm a die-hard anti-credit card and loans person. I would not encourage my kids to get any debt for a non-essential. Not even for college. and in my original post I obviously didn't think of that. There are so many credit card options out there today that one can easily go online or go to a bank and apply for a credit card. The overabundance of solicitations is annoying, at best. I also don't like the idea of the privacy of students being invaded. They should have a choice with any colleges or universities that they attend to opt out of having their personal information sold. In fact, it should be a given, I think. I think the whole topic of students learning to manage their own finances is a big one, and probably the process of instruction in this area is best started earlier rather than later. Forewarned is forearmed! Quote Link to comment Share on other sites More sharing options...
Murphy101 Posted January 2, 2009 Share Posted January 2, 2009 We use credit cards but pay at the end of the month. Period. Credit cards are useful -- without them you would need to carry lots of cash all the time. And how can you make a reservation at a hotel without a credit card these days? Using a credit card does not necessarily entail any debt at all. Period. nope not true at all. we stay at pretty decent hotels, not the ritz, but certainly not slumming at all either. and with a debit card or even travelers checks you don't have to carry a lot of cash either even without a debit card, why would you have to carry lots of cash all the time?:confused: paying at the end of the month is fine, but the vast majority of people and absolutely teens and twenty-somthings do not have the fortitude to do that. that and they are actively discouraged from using these loans and credits for that - they are told in college to use credit and loans to pay for college needs such as books, classes, dorm and so forth. As many of them have little to zero income it seems illogical to expect them to pay it off every month. rather they spend 4-6 years in college and another 10 - 20 paying the college debt off. If you want your kid to have the debt, then that's your choice, but I do not.:) Quote Link to comment Share on other sites More sharing options...
Murphy101 Posted January 2, 2009 Share Posted January 2, 2009 ug. that came across as snarky and I didn't intend it that way at all I was just in a hurry as my first cup of coffee and cinnimon donuts were calling me.:) Quote Link to comment Share on other sites More sharing options...
Harriet Vane Posted January 2, 2009 Share Posted January 2, 2009 This is not a debate as to whether or not credit cards are useful to have nor is it a debate about whether or not college students are mature/responsible enough to have them. The issue is that colleges are selling students' personal information for non-educational pursuits. Frankly, they have no business doing so. It's a breach of trust AND it's an invasion into student privacy. Quote Link to comment Share on other sites More sharing options...
Murphy101 Posted January 2, 2009 Share Posted January 2, 2009 This is not a debate as to whether or not credit cards are useful to have nor is it a debate about whether or not college students are mature/responsible enough to have them. The issue is that colleges are selling students' personal information for non-educational pursuits. Frankly, they have no business doing so. It's a breach of trust AND it's an invasion into student privacy. :iagree: Quote Link to comment Share on other sites More sharing options...
Gwen in VA Posted January 2, 2009 Share Posted January 2, 2009 I apologize for getting the thread off-topic. I only meant to point out the funny benefit of getting these credit card offers in the mail -- getting a credit card for ds was ridiculously easy, and without these mailings it has been more complicated for dd. The idea that the colleges are actually SELLING student info is definitely bothersome! Quote Link to comment Share on other sites More sharing options...
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