According to USA Today, a newly-released Federal Reserve survey shows that 17 percent fewer student credit card accounts were opened through colleges and alumni associations 2010 than in 2009, a decrease attributed to changes implemented as a result of the 2009 Credit CARD Act.
New laws resulting from the CARD Act have placed limits on how credit cards are marketed to college students - and what's required in order for credit companies to sign students up as cardholders.
Schools feel drop in credit card marketing revenue
Student credit cards are often marketed through campus associations, with the direct benefit of any new accounts going straight to the schools themselves. Colleges and alumni associations received $84.5 million from credit card marketing agreements in 2009, but only $73.3 million last year. Why the drop in student credit card revenues?
The Credit CARD Act put the brakes on spendthrift student debt by forbidding card companies from issuing a card to anyone under 21 unless they have a cosigner or can prove that they have the income to make payments. That regulation alone has changed the way credit cards are marketed to students, and has kept many schools from entering into marketing agreements at all.
New student accounts down
There were 4 percent fewer marketing agreements between colleges and credit card companies in 2010 than in 2009, reports the Lansing State Journal. As a result, only 1.7 million new student accounts were opened in 2010, down from 2 million in 2009.
But although some colleges bemoan the loss of credit card marketing income, others aren't feeling a big change. Many schools already had rules preventing any credit card marketing from appearing at sports matches or certain parts of campus.