In 2002, the Ohio State alumni association, acting with the university's approval, signed a contract to give MBNA the email addresses, mail addresses and phone numbers for 55,000 undergraduate students in exchange for a guaranteed minimum-payment and credit-card royalties from the affinity credit cards that the bank would sell to students. Under the contract, the credit card company was allowed to conduct at least five direct mail marketing campaigns each year in addition to three annual phone solicitations. While the credit card company also received information about faculty, staff and the parents of students, the company was explicitly prohibited from contacting these groups by phone. The credit card company was also allowed access to the university campus, where it could use a variety of marketing tactics to pursue students in-person.

Ohio State is far from unique; This week, Businessweek reveals that financial relationships between university alumni associations and the credit card industry are pervasive, explaining, "Some of the country's best-known and largest schools have multimillion-dollar credit-card deals, including the Universities of Michigan, Minnesota, and South Florida. Private schools also have these typically secret deals, but information about public institutions is more readily obtainable under disclosure laws."

Affinity cards are credit cards spiced up with a mascot or logo, to create a warm, fuzzy feeling that temporarily obscures the 18 percent interest rate. These cards are especially effective marketing tools for students, who want to support their schools and identify their schools with safe sources of information and advice. In 2006, the Ohio State alumni association earned $1.2 million in royalties from such affinity cards.

The article explains that alumni groups often take the lead in arranging for affinity credit-cards. Schools usually approve the contracts and provide the necessary access to student information, often allowing "on-campus hawking of credit cards through T-shirt giveaways, phone campaigns, and in-store promotions." Despite their obvious leverage, the universities do not negotiate favorable terms for students--in fact, the article reports that some schools use the same maneuver used those who marketed sub-prime mortgages--low-teaser interest rates that are quickly replaced with much higher double-digit ones.

The troubling dimensions of this practice force us to think about the role of universities in the lives of young people. Fundamentally, these universities are abusing the trust that students place in them on an issue that many young people find incredibly confusing. Because universities are where students turn for genuine counseling on everything from sex education to career advice, students are conditioned to think that a credit card marketed to them through their school is "safe" or good for them, when in fact, universities are simply functioning as profit-seeking brokers.

Most troubling is that, for a relatively small amount of money, universities are forfeiting the opportunity to provide students with the "safe" credit experience they are probably seeking. Universities are among the best positioned potential providers of financial education and credit products that facilitate responsible consumer behavior. I learned how to check my credit score and read my credit report from credit counselors at the Harvard University Employees Credit Union, which offers free credit counseling and low-interest credit cards and loans to students, faculty and staff. In the same way that they are seeking health, wellness and career advice, students naturally turn to school for advice on their finances, which are often the source of anxiety and confusion.

The ideal would be for universities to embrace this potential role and aggressively provide students with honest and accurate financial education and advice, instead of facilitating manipulative marketing ploys. But at the very least, legislators should act quickly to prevent universities receiving state funds from engaging in these kinds of deals. In Washington State, legislators only had to voice displeasure in order to have an impact. After legislators voiced concern over the Washington State Alumni Association's 10 year-long, $500,000 a year contract with MBNA in 2006, the alumni association responded by removing student information from their renewal contract with the credit card company.

The first step is for universities to do no harm: legislators should act to prevent these deals that inevitably result in students being misled and manipulated. Hopefully, however, universities will choose to embrace financial literacy and education as an area in which they can actually have a very positive impact on the lives of their students.