April 16, 2008

Cuomo Aide Says Investigation Into Colleges' Credit-Card Deals Will Soon Be Public

Washington — A top aide to New York’s attorney general indicated today that his office would make public within two months the results of its investigation into banks that are co-branding credit cards with universities — and people will be “shocked” at some arrangements.

The remarks came during a wide-ranging forum, held here at the American Enterprise Institute, on the topic “Higher Ed Governance: Stewardship or Sham?”

The event was billed as a look at the role of college-trustee oversight in preventing campus controversies that have made national headlines, such as last year’s student-loan scandal. While several panelists acknowledged that trustees should be more attentive in overseeing their colleges, the speakers summarily rejected the notion that higher-education governance was a “sham.”

Well placed to comment on the ongoing inquiry on student loans was Benjamin M. Lawsky, deputy counsel to New York’s attorney general, who remarked on the “bottleneck power” universities have come to wield over which companies and organizations can have exclusive access to their students. He insisted that while campus administrators are not bad, they are like “sitting ducks” to companies that seek some form of preferred status as a way of generating business.

That was the case with student-loan companies his office investigated last year, and it is the case with the credit-card arrangements his office is now investigating, Mr. Lawsky said. Such deals have sent millions of dollars to colleges and universities, he said.

“I think people will be shocked at some of these arrangements,” he said. —JJ Hermes

Comments

1. It’s just good business for a university with 40,000 students and 10,000 employees to leverage the potential customer base with credit card companies.

   Educators should not leave money on the table any more than a state AG with minimal jurisdiction over what happens in the other 49 states.

   It’s the latter that is shocking.

   — David Starr    Apr 17, 07:53 AM    #

2. David, I agree

   — John    Apr 17, 08:15 AM    #

3. The problem with commercial “deals” that do not relate to a university’s core mission of education, research and the advancement of knowledge is that they represent a betrayal of the trust between the students and alumni and the university. We tell them to give us their contact information and we will not sell or share that information, but then we do. The credit card co-branding business amounts to nothing more than selling a list. If university’s are going to enter into these arrangements, then we can no longer tell our students and alumni that we will keep their contact information private.
   I also think that these arrangements increase the extent to which our students and alumni perceive thier relationship with their alma mater to be transactional and based primarily on the exchange of money. Ideally university’s should view these constituencies as partners in building a lifelong learning community, not a financial resource to be exploited.

   — Judy    Apr 17, 09:03 AM    #

4. So, does Cuomo have any regrets about his investigation into student loans and how it has led to higher costs to students and potential loss of access? I doubt it.

   — Ann    Apr 17, 09:37 AM    #

5. Cuomo, colleagues and DC affiliates unfortunately contributed largely to a pending national crisis in student lending. The layer of problems they found was minimal to what is happening now in the market. They never talked about the deals and discounts lenders were able to offer. The expense to the borrowers is far worse now since lenders can no longer offer to pay origination fees and/or offer discounts that were far more beneficial to the students than Direct Lending. Yeah to a raise in Pell, but the amount and number of students helped is negated by the number of both Pell-eligible and Pell-ineligible students who are no longer getting good deals on loans and whose liklihood of getting loans at all is now in jeopardy. Not to mention the onslaught of direct-to consumer loans the changes have unleashed. I wish they would take responsiblity to how they’ve contributed to this mess. I’ve always looked to the democrats as education champions… I’m not voting for any of them going forward.

   — Frustrated    Apr 17, 09:43 AM    #

6. This is a continuation of Spitzer’s behaviour. Maybe Cuomo will get his comeuppance.

   — Lou    Apr 17, 05:17 PM    #

7. “Well placed to comment on the ongoing inquiry on student loans was Benjamin M. Lawsky, deputy counsel to New York’s attorney general, who remarked on the “bottleneck power” universities have come to wield over which companies and organizations can have exclusive access to their students. He insisted that while campus administrators are not bad, they are like “sitting ducks” to companies that seek some form of preferred status as a way of generating business.”

   This is kinda like Nike and Gatorade hawking their products while I’m watching the Superbowl—outrageous! I’m literally a “sitting duck” because I have no choice but to watch the ads and then buy Nike and Gatorade products since they bribed the TV executives to play their ads to the exclusion of the competition! Or, how about those dirtbags at Starbucks? They always bribe the owners of unused office space to install their stores in that space—people have no choice but to buy Starbucks lattes since they’re the only coffee shop in the building—another outrage! Does anybody notice how college athletes always wear Nike or Adidas sportswear? It gives the wrong impression to both young and old minds alike that these schools endorse Nike and Adidas sportswear, thereby suckering these unsuspecting souls into buying and wearing the Nike and Adidas products just like their favorite school’s athletes! The list of the currupt goes on forever. Thank goodness for Cuomo! It’s high time we install him as economic czar! That way, he can ensure righteous competition in the marketplace—individual choice is unreliable in these circumstances! There must be some government coercion to restore order and balance to the markets and Beverly Hills!

   — Patrick Bott    Apr 17, 07:27 PM    #

8. Remember the story about crying “WOLF” too many times?? Soon we will be investigating the inverstigator!! ENOUGH!!

   — JDS    Apr 18, 02:43 PM    #

9. Here’s the story so far, students: Mr. Cuomo has made it more difficult for you to get student loans. Now he is also going to make it more difficult for you to get credit cards. Aren’ t you glad Mr. Cuomo is looking out for you? It seems that he doesn’t think you can make your own responsible decisions about student loans and credit cards, so he needs to protect you. It doesn’t matter if he’s making things more difficult for you. It also doesn’t matter if you’re not from New York, not living in New York, or not going to school in New York. His actions affect you, too. So, what’s this really all about, you ask? Well, students, Mr. Cuomo needs to keep his name in the paper until it’s time to run for Governor, or maybe Senator if a space opens up there. When he pulls these stunts, he gets lots and lots of media attention. Isn’t that just great? And don’t worry about all those lenders and credit card companies that he’s bashing. They’ll be back in good standing as soon as they agree to help finance his election campaign.

   — CTE    Apr 18, 06:57 PM    #

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