DENTON, Texas _ It’s a hard pitch for anyone to skip: “Hi, you guys want a free gift today?”
Diann Gentry stood behind a table adorned with a bright yellow banner _ “Free Gift. Discover Card” _ and launched into her spiel to passing college students.
Just for filling out an application, they could have their pick of free T-shirts, calculators and radios.
The scene, at the University of North Texas student union recently, has been common for years on college campuses across America.
But this school year, UNT officials hope to remove credit-card vendors from the landscape, arguing that credit gets too many students in financial trouble.
UNT’s dean of students and the university union director are banding with student leaders to come up with a plan that would remove the vendors or at least restrict their activities on
According to a General Accounting Office report issued last summer, 24 state legislatures proposed or enacted laws restricting campus credit-card solicitations between 1999 and 2001. Texas leaves any regulating to the universities.
Research on college students’ credit-card debt is murky, though it’s clear that most students carry at least one card.
Two studies indicated that most students pay their balances each month and carry $1,000 or less on their cards. However, one study of students seeking government loans found an average balance of more than $2,700, the GAO study said.
National associations representing banks and credit-card companies say the studies exaggerate the problem, and they note that college students are adults who can make their own decisions.
The groups also say banning vendors won’t prevent students from getting in over their heads with credit.
“The issue is financial literacy,” said Catherine Pulley, spokeswoman for the Washington-based American Bankers Association. “Let’s all stop playing the blame game. It’s not just about credit. It’s not necessarily college students. It’s knowing what to do with your money.”
Joe Belew, president of the Consumer Bankers Association in arlington, Va., said the banking industry has standards for vendors and monitors their activities.
“Giving out a T-shirt is not over the line,” Belew said. “It’s an attention grabber.”
Addressing the free gift marketing strategy does have an effect, others say. About three years ago, at the suggestion of student leaders, Georgia Institute of Technology informed vendors that they had to give students the gifts with no strings attached.
In other words, students could take the items without filling out card applications. Eventually, the vendors stopped coming, said Chris Kavanaugh, president of Georgia Tech’s student government.
UNT student leaders and administrators said they would study other colleges’ approaches as they figure out what tack to take.
Universities are sometimes reluctant to police vendors on campus because they find it hard to untangle themselves from lucrative contracts, said Robert Manning, author of “Credit Card Nation: the Consequences of America’s Addiction to Credit.”
Manning, a professor at the Rochester Institute of Technology, devoted a chapter of his book to credit-card issues on college campuses.
“The sad part of it is the universities themselves refuse to accept any responsibility because they accept so much financial gain,” Manning said.
In addition to colleges earning money by renting space to vendors, some alumni groups receive royalties for allowing credit-card companies to solicit cards with the school’s insignia. In his book, Manning details the University of Tennessee’s seven-year, $16.5 million licensing deal with a credit-card company.
The University of Texas alumni group earns about $1 million a year from its card.
It receives royalties each time one of the 85,000 card users makes a charge, said Jim Boon, executive director of the Texas Exes.
Southern Methodist University doesn’t see credit-card debt as a major problem among its students and has no plans to curtail vendors’ visits, said James Caswell, the college’s dean of students. Caswell said education is the best tool to prevent student debt.
Texas A&M University takes a different approach, allowing only one vendor on campus because of an exclusive contract with Wells Fargo. Officials at Texas A&M say the deal, signed in 1998, helps the university cut down on campus solicitations.
“You can’t go anywhere without being solicited,” said Michael B. Huddleston, the university’s director of contract administration.
“Having it under one master agreement takes some of the pressure away from students.”
UNT’s alumni association has an eight-year, $1 million contract with MBNA American Bank for its credit card. It received $600,000 up front from the company, said Will Hansen, executive director of North Texas Exes.
North Texas Exes sponsors a credit card vendor table, and Hansen said he doesn’t see a problem with the practice.
“I can remember as a student seeing the same thing,” Hansen said. “You can either stop, fill out a credit card or just keep rolling. We live in a free country.”