Pittsburgh Post-Gazette: “Penn State University earned more than $2.7 million in fees and royalties in 2011 through a deal helping Bank of America peddle high-interest credit cards to its alumni and students. That put the university at the very top of the list of the colleges and universities in partnership with the credit industry, according to information that’s now available publicly following government overhauls meant to — among other things — make it harder for credit card companies to target college students.”
Under the contract, every time a student or alum of Penn State signs up for a card issued by a particular Bank of America subsidiary, the alumni association gets a payment of $5 to $10. The association also gets a 0.5 percent royalty on all purchases using those cards.
And Bank of America? It collects an 18 percent interest rate on the cards; nationally, low-interest cards have an interest rate of 11 percent. Penn State alumni are renowned for their legendary loyalty to the school; seems like they might be getting taken advantage of as a result.