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United States Government Accountability Office: 
GAO: 

Report to Congressional Committees: 

February 2014: 

Credit Cards: 

Marketing to College Students Appears to Have Declined: 

GAO-14-225: 

GAO Highlights: 

Highlights of GAO-14-225, a report to congressional committees. 

Why GAO Did This Study: 

Institutions of higher education, alumni groups, and other affiliated 
organizations may enter into agreements with credit card issuers for 
“college affinity cards,” in which issuers use the institution's name 
or logo in exchange for payments. Separately, some credit card issuers 
offer “college student credit cards,” which are expressly targeted to 
students. Partly in response to concerns about card issuer practices 
and rising student credit card debt, Congress passed the Credit Card 
Accountability Responsibility and Disclosure Act of 2009. The act 
includes consumer protections and requires disclosures specifically 
for consumers under the age of 21, including limits to on-campus 
credit card marketing and requirements for public disclosure of 
affinity card agreements. The act mandates that GAO review these 
agreements and assess their effect on student credit card debt. 

This report examines (1) trends associated with and characteristics of 
college affinity card agreements, (2) the extent of marketing for 
college affinity cards and college student credit cards, and (3) what 
is known about the effect of use of these cards on student credit card 
debt. GAO analyzed data from the Federal Reserve and CFPB, including a 
sample of 39 affinity agreements filed by the issuers. GAO also 
analyzed data on student credit card use or indebtedness; interviewed 
officials from federal agencies, credit card issuers, and affiliated 
organizations. 

What GAO Found: 

Trends associated with college affinity card agreements include fewer 
agreements and cardholders and declining payments, according to data 
GAO analyzed from the Board of Governors of the Federal Reserve System 
(Federal Reserve) and the Bureau of Consumer Financial Protection 
(CFPB). The number of affinity card agreements declined from 1,045 in 
2009 to 617 in 2012 (41 percent). More than 70 percent of the 
agreements in 2012 were with institutions of higher education or 
alumni organizations, and one issuer-—FIA Card Services, a subsidiary 
of Bank of America—-had 67 percent of all agreements. Affinity card 
issuers paid $50.4 million to all organizations in 2012, 40 percent 
less than in 2009. In most cases, payments were based on numbers of 
cardholders and the amount spent on the cards. The card agreements 
covered contractual obligations related to such things as marketing 
practices, target populations, use of the organization's logo or 
trademark, terms of payment, and, in some cases, service standards. 

Student-focused marketing of affinity and student cards on campus 
appears to have declined. Four large affinity card issuers GAO 
interviewed (representing 91 percent of cardholders) said that they 
primarily targeted alumni and no longer marketed affinity cards 
directly to students. In interviews with GAO, institutions of higher 
education and affiliated organizations agreed that affinity card 
marketing directly to students had ceased. In addition, five of the 
nine largest overall credit card issuers that also issue college 
student credit cards told GAO they no longer actively marketed these 
cards (such as through direct mail, e-mail, or on-campus activity), 
but rather relied upon websites and bank branches. Representatives of 
five institutions with large affinity card agreements told GAO that 
they generally noticed a decline in on-campus credit card marketing in 
recent years. Consistent with these observations, available data show 
a decline in card solicitations to students in recent years. For 
example, a survey of students in 2013 by Student Monitor, a research 
firm, found that 6 percent of students reported obtaining a credit 
card as a result of a direct mail solicitation, compared with 36 
percent in 2000. 

Data are not available to definitively determine the effect that 
affinity cards and college student credit cards have had on student 
credit card debt. For affinity cards, the effect may be limited 
because fewer students appear to hold such cards. For college student 
credit cards, the effect is difficult to determine because data are 
available for credit cards in general but not for student credit cards 
in particular. However, students' overall use of credit cards appears 
to have declined in recent years. For example, Student Monitor 
reported 33 percent of students owned credit cards in 2013 versus 53 
percent in 2004, a trend corroborated by several other studies that 
GAO identified. But Student Monitor found that students with credit 
cards in their names increasingly obtained the cards before starting 
college. In addition, it found that in 2013, students charged an 
average of $171 monthly on their cards, 80 percent of the cards had a 
credit limit of $1,000 or less, and 72 percent of students said they 
paid their outstanding charges in full each month. Student Monitor 
also reported that one quarter of students in 2013 paid a late payment 
fee at least once since they acquired the credit card, with almost 
half of those paying more than once. 

What GAO Recommends: 

GAO makes no recommendations in this report. 

View [hyperlink, http://www.gao.gov/products/GAO-14-225]. For more 
information, contact Alicia Puente Cackley at (202) 512-8678 or 
cackleya@gao.gov. 

[End of section] 

Contents: 

Letter: 

Background: 

Changes in the College Affinity Card Market Since the CARD Act: 

Marketing to Students Appears to Have Declined: 

Effect of College Affinity and Student Cards on Student Credit Card 
Debt Largely Is Unknown: 

Agency Comments: 

Appendix I: Objectives, Scope, and Methodology: 

Appendix II: GAO Contact and Staff Acknowledgments: 

Tables: 

Table 1: College Affinity Card Agreements, Cardholders, and New 
Cardholders, 2009-2012: 

Table 2: Affinity Card Agreements, Cardholders, and New Cardholders, 
by Organization Type, 2009-2012: 

Table 3: Number of Agreements by Issuer, 2009-2012: 

Table 4: Total Payments, Average Payments, and Median Payments from 
Affinity Card Issuers to Organizations, by Organization Type, 2012: 

Table 5: Prevalence of Target Markets/Members in 39 Reviewed 
Agreements: 

Table 6: Prevalence of Marketing Approaches in 39 Reviewed Agreements: 

Table 7: Prevalence of Payment Types in 39 Reviewed Agreements: 

Table 8: 2011 College Credit Card Agreements Selected for Review, by 
Institution Type, Issuer, and Size Categories: 

Figures: 

Figure 1: Prevalence of Affinity Card Agreements by Organization Type, 
2012: 

Figure 2: Number of Affinity Card Agreements, by Organization Type, 
2009-2012: 

Figure 3: Number of Affinity Card Agreements, FIA Card Services and 
Other Issuers, 2009 and 2012: 

Figure 4: Length of Time (in Years) That Organizations Had a College 
Affinity Card Agreement, for 38 Agreements Reviewed: 

Figure 5: Percentage of Students Obtaining Their Credit Cards, by 
Method of Solicitation, 2000 and 2013: 

Figure 6: Percent of Students Who Reported Owning a Credit Card, 2010-
2013: 

Figure 7: Time Period of Credit Card Acquisition for Students with 
Credit Cards, 2000 and 2013: 

Abbreviations: 

CFPB: Bureau of Consumer Financial Protection: 

DCI: data collection instrument: 

[End of section] 

United States Government Accountability Office: 
GAO:
441 G St. N.W. 
Washington, DC 20548: 

February 25, 2014: 

The Honorable Tim Johnson: 
Chairman: 
The Honorable Mike Crapo: 
Ranking Member: 
Committee on Banking, Housing, and Urban Affairs: 
United States Senate: 

The Honorable Jeb Hensarling: 
Chairman: 
The Honorable Maxine Waters: 
Ranking Member: 
Committee on Financial Services: 
House of Representatives: 

Institutions of higher education and affiliated organizations, such as 
alumni associations, sometimes have agreements with credit card 
issuers for "college affinity cards." These cards often bear the name 
or logo of the school or organization, and, in return, the issuer pays 
a portion of the proceeds of the credit card to the school or 
organization. In addition, some card issuers offer "college student 
credit cards" that are unaffiliated with a particular institution but 
designed specifically for college students. Consumer advocates and 
some members of Congress have had concerns in recent years about 
student credit card debt and the marketing practices, such as on-
campus solicitations, used to enroll students in cards.[Footnote 1] 

To address some of these concerns, Congress passed the Credit Card 
Accountability Responsibility and Disclosure Act of 2009 (CARD Act). 
[Footnote 2] Among other things, the act requires card issuers to file 
annually with federal regulators the terms and conditions of their 
college affinity credit card agreements with institutions of higher 
education or affiliated organizations.[Footnote 3] The CARD Act also 
mandates that we report on several issues related to college affinity 
and college student credit cards.[Footnote 4] This report examines (1) 
the trends associated with and characteristics of college affinity 
card agreements, (2) the extent of marketing for college affinity and 
college student credit cards, and (3) what is known about the effect 
of the use of affinity cards and student credit cards on student 
credit card debt. 

To address our first objective, we reviewed annual reports submitted 
to Congress by the Board of Governors of the Federal Reserve System 
(Federal Reserve) and the Bureau of Consumer Financial Protection, 
also known as the Consumer Financial Protection Bureau (CFPB), and 
analyzed the public database of agreements that are reported by 
issuers annually to them. We assessed the reliability of these 
databases by interviewing Federal Reserve and CFPB officials 
knowledgeable about the data and checking the data for illogical 
values or obvious errors. We found the data to be sufficiently 
reliable for describing the general characteristics and trends of the 
affinity card marketplace. For in-depth analysis, we further selected 
a subset of active agreements using a nonprobability sample of 39 
college affinity card agreements between issuers and institutions of 
higher education or affiliated organizations from 2011 (the most 
recent year for which the agreements were available).[Footnote 5] The 
sample included the agreements with the largest number of cardholders 
overall, for each issuer, and for institutions of higher education. 
Collectively, the agreements in our sample covered about 38 percent of 
all cardholders associated with affinity credit cards in 2011, which 
allows us to make statements of context and describe multiple factors 
relating to college credit card agreements. Findings from this limited 
review cannot be generalized to the overall population of all 
agreements for college affinity cards in 2011. We also interviewed 
representatives of six institutions of higher education and affiliated 
organizations, including those party to three of the four largest 
agreements, as determined by number of cardholders. For the second and 
third objectives, we reviewed studies, such as those by Sallie Mae and 
Student Monitor, on student credit card use or indebtedness.[Footnote 
6] We assessed these data by interviewing Student Monitor and Sallie 
Mae officials knowledgeable about the data and checked the data for 
illogical values or obvious errors and found them to be sufficiently 
reliable for providing general information on student credit card use. 
Furthermore, we interviewed representatives of seven credit card 
issuers, which included the five largest general credit card issuers 
as determined by portfolio size in 2011. Four of these seven issuers 
offered affinity credit cards, representing 91 percent of the affinity 
card market in 2012, as measured by number of cardholders. Five of 
these seven issuers also offered student credit cards. Finally, we 
interviewed academics and representatives of federal agencies and 
other organizations that have studied issues related to college 
affinity cards or college students' credit card use. 

We conducted this performance audit from December 2012 to February 
2014 in accordance with generally accepted government auditing 
standards. Those standards require that we plan and perform the audit 
to obtain sufficient, appropriate evidence to provide a reasonable 
basis for our findings and conclusions based on our audit objectives. 
We believe that the evidence obtained provides a reasonable basis for 
our findings and conclusions based on our audit objectives. 

Background: 

Almost 537 million general-purpose credit cards were in circulation in 
the United States as of the end of 2012.[Footnote 7] Since at least 
the early 1990s, some credit card issuers have offered college 
affinity cards, which are governed by contracts (agreements) between 
the issuer and an organization such as a college, university, or 
alumni association. The cards typically bear the organization's logo. 
In return, the issuer makes payments to the organization based on 
factors such as the number of cards issued or the amount charged to 
the cards. College affinity cards can be an effective way for issuers 
to market credit cards because college alumni often have an attachment 
to their schools. 

In addition, some credit card issuers, including banks and credit 
unions, offer college student credit cards--cards that are 
specifically labeled and intended for college students. As of November 
2013, 6 of the 10 largest credit card issuers offered these cards, 
such as Citibank's Citi Dividend Card for College Students and Bank of 
America's BankAmericard Cash Rewards for Students.[Footnote 8] Issuers 
use these cards to help build a base of customers who may continue 
using the issuers' credit cards after graduation. The terms and 
conditions of college student credit cards may be somewhat different 
from those of other credit cards--for example, they may have lower 
initial credit limits.[Footnote 9] 

In 2009, the CARD Act changed the marketing and terms and conditions 
of credit cards for young people, requiring additional consumer 
protections and disclosures for students and consumers under the age 
of 21.[Footnote 10] Among other things, the act requires that: 

* any new credit card application for someone under 21 contain either 
(1) a co-signer over 21 who has the ability to make payments on the 
debts from the account and who will be jointly liable for debts 
incurred by the applicant until he or she is age 21, or (2) supporting 
information showing that the applicant would have the independent 
ability to make payments on any debt incurred from the use of the card 
(an "ability to pay"); 

* co-signers of such accounts approve increased credit lines until the 
cardholder is 21; 

* card issuers not obtain a credit report for someone under 21 to use 
to make an unsolicited prescreened credit offer; and: 

* card issuers and creditors not offer a student any tangible item to 
induce the student to apply for or participate in a credit card on or 
near the campus of the institution of higher education or at an event 
sponsored by or related to an institution of higher education. 

The act also requires credit card issuers to submit to CFPB each year 
the terms and conditions of any college affinity credit card agreement 
between the issuer and an institution of higher education or an 
affiliated organization in effect at any time during the preceding 
calendar year.[Footnote 11] In addition to a copy of any college 
credit card agreement to which the issuer was a party, issuers also 
must submit summary information for each agreement, such as the number 
of cardholders covered with accounts open at year-end (regardless of 
when the account was opened) and the payments made by the issuer to 
the institution or organization during the year.[Footnote 12] CFPB 
must submit to Congress, and make available to the public, an annual 
report that contains the information submitted by the card issuers to 
CFPB.[Footnote 13] On December 17, 2013, CFPB issued the fourth annual 
report, which covered the 2012 calendar year. 

Changes in the College Affinity Card Market Since the CARD Act: 

Number of Card Agreements, Cardholders, and Payments Declined in 2009-
2012: 

Since the CARD Act was passed in 2009, the numbers of college affinity 
card agreements and cardholders have decreased, according to data from 
the Federal Reserve and CFPB. From 2009 through 2012, the number of 
card agreements declined from 1,045 to 617 (41 percent). Similarly, 
the total number of cardholders for college affinity cards declined by 
40 percent (see table 1). 

Table 1: College Affinity Card Agreements, Cardholders, and New 
Cardholders, 2009-2012: 

Number of agreements; 
2009: 1,045; 
2010: 1,005; 
2011: 796; 
2012: 617; 
Net Change, 2009-2012: (428); 
Percent Change, 2009-2012: -41%. 

Number of cardholders as of Dec. 31; 
2009: 2,041,511; 
2010: 1,709,054; 
2011: 1,503,664; 
2012: 1,222,718; 
Net Change, 2009-2012: (818,793); 
Percent Change, 2009-2012: -40%. 

Number of new cardholders; 
2009: 55,747; 
2010: 46,385; 
2011: 43,227; 
2012: 45,519; 
Net Change, 2009-2012: (10,228); 
Percent Change, 2009-2012: -18%. 

Source: CFPB. 

[End of table] 

In 2012, 43 percent of the 617 college affinity card agreements were 
with alumni associations and 28 percent were with a college, 
university, or other institution of higher education (see figure 1). 

Figure 1: Prevalence of Affinity Card Agreements by Organization Type, 
2012: 

[Refer to PDF for image: pie-chart] 

Alumni association: 43% (268); 
Institution of higher education: 28% (175); 
Other (including multiple institutions: 20% (126); 
Foundation: 8% (48). 

Source: GAO analysis of CFPB report. 

Note: The percentages in the four categories do not add up to 100 
percent due to rounding. "Other" includes fraternities, sororities, 
and professional or trade organizations, as well as agreements with 
multiple organizations, such as a university and an alumni association. 

[End of figure] 

Among these organization types, the greatest decline in the number of 
card agreements since 2009 was for institutions of higher education 
(see figure 2). 

Figure 2: Number of Affinity Card Agreements, by Organization Type, 
2009-2012: 

[Refer to PDF for image: multiple line graph] 

Alumni association: 
Year: 2009: 349; 
Year: 2010: 364; 
Year: 2011: 335; 
Year: 2012: 268. 

Institution of higher education: 
Year: 2009: 413; 
Year: 2010: 375; 
Year: 2011: 260; 
Year: 2012: 175. 

Other (including multiple institutions): 
Year: 2009: 199; 
Year: 2010: 192; 
Year: 2011: 147; 
Year: 2012: 126. 

Foundation: 
Year: 2009: 84; 
Year: 2010: 74; 
Year: 2011: 54; 
Year: 2012: 48. 

Source: GAO analysis of Federal REserve and CFPB reports. 

[End of figure] 

In contrast, the largest decline in the number of overall cardholders 
occurred within alumni associations, while "other" organizations (a 
category that includes fraternities, sororities, and professional or 
trade organizations) had the largest decrease in the number of new 
cardholders (see table 2). 

Table 2: Affinity Card Agreements, Cardholders, and New Cardholders, 
by Organization Type, 2009-2012: 

Alumni Association: 
Number of Agreements: 
Net Change: (81); 
Percent change: -23%; 
Number of Cardholders: 
Net Change: (290,196); 
Percent change: -28%; 
Number of New Cardholders: 
Net Change: 3,779; 
Percent change: 13%. 

Foundation: 
Number of Agreements: 
Net Change: (36); 
Percent change: -43%; 
Number of Cardholders: 
Net Change: (55,238); 
Percent change: -41%; 
Number of New Cardholders: 
Net Change: (2,137); 
Percent change: -53%. 

Institutions of Higher Education: 
Number of Agreements: 
Net Change: (238); 
Percent change: -58%; 
Number of Cardholders: 
Net Change: (230,732); 
Percent change: -51%; 
Number of New Cardholders: 
Net Change: (4,077); 
Percent change: -32%. 

Other (including multiple organizations): 
Number of Agreements: 
Net Change: (73); 
Percent change: -37%; 
Number of Cardholders: 
Net Change: (242,627); 
Percent change: -57%; 
Number of New Cardholders: 
Net Change: (7,793); 
Percent change: -73%. 

Total: 
Number of Agreements: 
Net Change: (428); 
Percent change: -41%; 
Number of Cardholders: 
Net Change: (818,793); 
Percent change: -40%; 
Number of New Cardholders: 
Net Change: (10,228); 
Percent change: -18%. 

Source: GAO analysis of Federal Reserve and CFPB reports. 

Note: Reported numbers include corrections filed with the Federal 
Reserve and CFPB after the initial report was issued. 

[End of table] 

In 2012, 23 credit card issuers offered college affinity cards. 
[Footnote 14] One issuer--FIA Card Services, N.A., a subsidiary of 
Bank of America--had 412 of the 617 reported agreements (67 percent of 
the market). However, as seen in figure 3, the company's market share 
has dropped since 2009. 

Figure 3: Number of Affinity Card Agreements, FIA Card Services and 
Other Issuers, 2009 and 2012: 

[Refer to PDF for image: 2 pie charts] 

2009: 
FIA Card Services, N.A.: 87% (906); 
Other issuers: 13% (139). 

2012: 
FIA Card Services, N.A.: 67% (412); 
Other issuers: 33% (205). 

Source: GAO analysis of Federal Reserve and CFPB reports. 

[End of figure] 

Most affinity card issuers had a small number of card agreements--for 
example, the majority of issuers had one or two affinity card 
agreements (see table 3). 

Table 3: Number of Agreements by Issuer, 2009-2012: 

FIA Card Services, N.A.; 
2009: 906; 
2010: 848; 
2011: 633; 
2012: 412; 
Net Change, 2009-2012: (494). 

Capital One Bank[A]; 
2009: 1; 
2010: 10; 
2011: 32; 
2012: 55; 
Net Change, 2009-2012: 54. 

U.S. Bank National Association ND; 
2009: 60; 
2010: 54; 
2011: 51; 
2012: 48; 
Net Change, 2009-2012: (12). 

UMB Bank, N.A.; 
2009: 6; 
2010: 23; 
2011: 22; 
2012: 39; 
Net Change, 2009-2012: 33. 

Chase Bank USA, N.A.; 
2009: 36; 
2010: 28; 
2011: 17; 
2012: 15; 
Net Change, 2009-2012: (21). 

Pennsylvania State Employees Credit Union; 
2009: 13; 
2010: 13; 
2011: 13; 
2012: 14; 
Net Change, 2009-2012: 1. 

INTRUST Bank, N.A.; 
2009: 8; 
2010: 9; 
2011: 10; 
2012: 10; 
Net Change, 2009-2012: 2. 

USAA Savings Bank; 
2009: 1; 
2010: 2; 
2011: 2; 
2012: 4; 
Net Change, 2009-2012: 3. 

Compass Bank; 
2009: 1; 
2010: 2; 
2011: 3; 
2012: 2; 
Net Change, 2009-2012: 1. 

GE Capital Retail Bank; 
2009: 3; 
2010: 2; 
2011: 2; 
2012: 2; 
Net Change, 2009-2012: (1). 

Michigan State University Federal Credit Union; 
2009: 1; 
2010: 2; 
2011: 2; 
2012: 2; 
Net Change, 2009-2012: 1. 

Oregon Community Credit Union and OCCU Card Services, LLC; 
2009: 0; 
2010: 0; 
2011: 0; 
2012: 2; 
Net Change, 2009-2012: 2. 

Pen Air Federal Credit Union; 
2009: 0; 
2010: 1; 
2011: 1; 
2012: 2; 
Net Change, 2009-2012: 2. 

Banco Popular de Puerto Rico; 
2009: 1; 
2010: 1; 
2011: 1; 
2012: 1; 
Net Change, 2009-2012: 0. 

Barclays Bank Delaware; 
2009: 1; 
2010: 1; 
2011: 1; 
2012: 1; 
Net Change, 2009-2012: 0. 

Carolina Trust Federal Credit Union; 
2009: 0; 
2010: 1; 
2011: 1; 
2012: 1; 
Net Change, 2009-2012: 1. 

Elevations Credit Union; 
2009: 1; 
2010: 1; 
2011: 1; 
2012: 1; 
Net Change, 2009-2012: 0. 

MIT Credit Union; 
2009: 0; 
2010: 0; 
2011: 0; 
2012: 1; 
Net Change, 2009-2012: 1. 

PNC Bank, National Association; 
2009: 2; 
2010: 2; 
2011: 1; 
2012: 1; 
Net Change, 2009-2012: (1). 

Purdue Federal Credit Union; 
2009: 1; 
2010: 1; 
2011: 1; 
2012: 1; 
Net Change, 2009-2012: 0. 

University of Illinois Employees Credit Union; 
2009: 0; 
2010: 1; 
2011: 1; 
2012: 1; 
Net Change, 2009-2012: 1. 

USC Credit Union; 
2009: 0; 
2010: 1; 
2011: 1; 
2012: 1; 
Net Change, 2009-2012: 1. 

Wright-Patt Credit Union, Inc; 
2009: 0; 
2010: 0; 
2011: 0; 
2012: 1; 
Net Change, 2009-2012: 1. 

Commerce Bank, N.A.; 
2009: 1; 
2010: 0; 
2011: 0; 
2012: 0; 
Net Change, 2009-2012: (1). 

First National Bank of Omaha; 
2009: 2; 
2010: 2; 
2011: 0; 
2012: 0; 
Net Change, 2009-2012: (2). 

Total; 
2009: 1,045; 
2010: 1,005; 
2011: 796; 
2012: 617; 
Net Change, 2009-2012: (428). 

Source: GAO analysis of Federal Reserve and CFPB reports. 

[A] Includes agreements filed by Capital One Bank (USA), N.A. and 
Capital One, N.A. 

[End of table] 

The payments that card issuers made to institutions with which they 
had affinity card agreements have decreased since 2009, consistent 
with the decline in the number of agreements and cardholders.[Footnote 
15] As shown in table 4, affinity card issuers made payments of $50.4 
million to participating institutions in 2012. The median payment in 
2012 was about $5,000, while the average (mean) was about $82,000, 
with alumni associations receiving the highest average payment. 

Table 4: Total Payments, Average Payments, and Median Payments from 
Affinity Card Issuers to Organizations, by Organization Type, 2012: 

Alumni association; 
Total Payments: $30,805,378; 
Average Payment: $115,376; 
Median Payment: $6,163; 
Range: $0 - $2,742,743. 

Institution of higher education; 
Total Payments: $11,791,359; 
Average Payment: $67,379; 
Median Payment: $3,252; 
Range: $0 - $1,505,550. 

Other; 
Total Payments: $4,239,222; 
Average Payment: $33,645; 
Median Payment: $6,413; 
Range: $0 - $898,924. 

Foundation; 
Total Payments: $3,560,142; 
Average Payment: $74,170; 
Median Payment: $1,833; 
Range: $0 - $1,157,737. 

Total (Overall); 
Total Payments: $50,396,102; 
Average Payment: $81,812; 
Median Payment: $5,062; 
Range: $0 - $2,742,743. 

Source: GAO analysis of CFPB data. 

Note: Numbers may not add to the shown total because of rounding. 

[End of table] 

Total payments declined by 40 percent between 2009 and 2012. The 
largest decline in payments was to alumni associations, while 
institutions of higher education had the largest decline in affinity 
card agreements over this period. However, during that period, the 
average payment to institutions of higher education increased by about 
$13,200, while the average payment to alumni associations decreased by 
about $13,700. The University of Southern California, through its 
agreement with FIA Card Services, received about $1.5 million, the 
largest payment to an institution of higher education in 2012. Among 
all the organizations, the Penn State Alumni Association received the 
largest payment in 2012--about $2.7 million, from FIA Card Services. 
In contrast, 22 percent of the agreements did not result in any 
payments to organizations in 2012. 

Card Agreements Can Cover Target Customers, Payments, and Marketing 
Practices: 

College affinity card agreements serve as contracts between the card 
issuer and the participating organization. Using a data collection 
instrument, we reviewed 39 agreements filed with CFPB, which 
represented about 38 percent of all cardholders covered by college 
affinity card agreements in 2011.[Footnote 16] The agreements 
typically covered such things as the card's target market, marketing 
practices, and payments to the participating organization. As shown in 
figure 4, the length of time that the card agreements had been in 
effect varied. The oldest originally was signed in January 1991 and 
the most recent in December 2011. Many of the agreements had been 
amended or received addendums since they were first adopted, which in 
some cases extended the existing terms of the original agreement. 

Figure 4: Length of Time (in Years) That Organizations Had a College 
Affinity Card Agreement, for 38 Agreements Reviewed: 

[Refer to PDF for image: vertical bar graph] 

Length of agreement: 1-5 years; 
Number of agreements: 7. 

Length of agreement: 6-10 years; 
Number of agreements: 8. 

Length of agreement: 11-15 years; 
Number of agreements: 12. 

Length of agreement: 16-21 years; 
Number of agreements: 11. 

Source: GAO. 

Note: One of the 39 agreements we reviewed did not include dates and is 
not included in this analysis. 

[End of figure] 

In addition to credit cards, 30 of the 39 agreements included other 
financial products, such as deposit and checking accounts, automobile 
and home loans, and investment accounts. Some agreements included 
exclusivity provisions that restricted the organization from offering 
its members these products except in conjunction with the current 
affinity card issuer. 

Target Customers and Marketing Practices: 

The agreements identified which potential cardholders the issuer could 
solicit and how. Thirty-seven of the 39 reviewed agreements identified 
specific target customers for the college affinity card. Most often, 
issuers targeted alumni for the cards, but two-thirds of the 
agreements also allowed the issuers to solicit undergraduate students 
(see table 5).[Footnote 17] Most of the agreements identified multiple 
target populations for card solicitations. 

Table 5: Prevalence of Target Markets/Members in 39 Reviewed 
Agreements: 

Target market: Alumni; 
Number of agreements identifying this target market: 35. 

Target market: Students (undergraduate); 
Number of agreements identifying this target market: 26. 

Target market: Employees; 
Number of agreements identifying this target market: 22. 

Target market: Season ticket holders/fans; 
Number of agreements identifying this target market: 22. 

Target market: Donors or friends; 
Number of agreements identifying this target market: 22. 

Target market: Parents; 
Number of agreements identifying this target market: 10. 

Target market: Other (graduate students, organization member, etc.); 
Number of agreements identifying this target market: 23. 

Source: GAO. 

Note: Agreements often cited more than one target market. 

[End of table] 

All but two of the 39 reviewed agreements included provisions 
requiring the organization to provide a list of its members to the 
issuer for marketing purposes. However, two-thirds of the agreements 
included mechanisms allowing the organizations to exclude members who 
requested that they not receive third-party solicitations. Nine of the 
reviewed agreements also included restrictions on soliciting student 
members, generally by restricting their inclusion on the provided 
lists. 

The agreements allowed card issuers to solicit potential cardholders 
through a variety of methods (see table 6). More than 80 percent of 
the reviewed agreements allowed issuers to use telemarketing, website 
links (such as from the alumni association's website), direct mail, 
and print advertisements (such as in sport programs or member 
magazines). All of the reviewed agreements allowed the issuers to use 
more than one of the different methods that we tracked. 

Table 6: Prevalence of Marketing Approaches in 39 Reviewed Agreements: 

Marketing method: Use of trademark/logo/mascot; 
Number of agreements including this marketing method: 39. 

Marketing method: Print advertisements; 
Number of agreements including this marketing method: 37. 

Marketing method: Direct mail; 
Number of agreements including this marketing method: 37. 

Marketing method: Links on website; 
Number of agreements including this marketing method: 34. 

Marketing method: Telemarketing; 
Number of agreements including this marketing method: 32. 

Marketing method: Access to campus; 
Number of agreements including this marketing method: 30. 

Marketing method: E-mail or Internet solicitations; 
Number of agreements including this marketing method: 30. 

Source: GAO. 

Note: Agreements often included more than one marketing method. 

[End of table] 

All of the reviewed agreements included provisions allowing the card 
issuers to use the trademark or logo of the institution of higher 
education or organization. In some instances, the issuer could put 
these trademarks on gifts for individuals who completed applications 
or on other items. All but two of the agreements included provisions 
for obtaining prior approval of marketing materials from the 
organization or institution (to help ensure that the card issuer used 
the trademark or logo appropriately). 

Payments to Organizations under the Agreements: 

All but one of the 39 reviewed agreements contained information about 
the payment arrangement between the issuer and the affiliated 
organization or institution of higher education. As shown in table 7, 
issuers most frequently provided payments to the organization or 
institution based on the number of new and open cards and the amount 
of money charged to the cards. Many included bonus payments for 
accounts that the organization or institution originated (as opposed 
to ones originated through the issuer), and three included bonus 
payments if the number of cardholders exceeded a threshold. Many of 
the agreements also included a guaranteed payment to the organization 
or institution that was not based on the number of cardholders or 
amount charged. 

Table 7: Prevalence of Payment Types in 39 Reviewed Agreements: 

Type of payment: Payment per new card; 
Number of agreements including this payment type: 31. 

Type of payment: Payment based on number of open cards; 
Number of agreements including this payment type: 31. 

Type of payment: Payment based on spending volume; 
Number of agreements including this payment type: 31. 

Type of payment: Guaranteed payment or payment; 
Number of agreements including this payment type: 27. 

Type of payment: Payment for funded savings or checking account; 
Number of agreements including this payment type: 16. 

Source: GAO. 

Note: Agreements often included more than one type of payment. 

[End of table] 

The reviewed agreements sometimes contained payments based on other 
related products or included broader financial support to the 
organization or institution. For example, some payments under the 
agreements were based on balances of certificates of deposit or loans 
provided. In some instances, the reviewed agreements included support 
for scholarships or building renovations. 

Consumer Protections and Service Standards: 

About one-quarter of the 39 reviewed agreements included explicit 
consumer or cardholder protections or service standards. The consumer 
protections included restrictions on how often and how issuers could 
solicit group members, as well as restrictions on the sharing of the 
member database or student information with third parties. Two of the 
reviewed agreements also included metrics to assess servicing 
standards. For example, one agreement with an alumni association 
specified how quickly the issuer would answer and resolve calls and 
also required that the credit card terms and features (such as fees 
and annual percentage rates) be "best in class" when compared with a 
set of identified peer institutions. Additionally, most of the 
reviewed agreements included provisions allowing the issuer to make 
periodic adjustments to the card program and its terms and features. 

Marketing to Students Appears to Have Declined: 

According to available data and representatives of card issuers and 
affiliated organizations, marketing of college affinity cards and 
college student credit cards directly to students appears to have 
declined. 

Largest Issuers of Affinity Credit Cards Stated They No Longer 
Marketed the Cards Directly to Students: 

As of 2013, college affinity cards were not being marketed directly to 
students, according to representatives of issuers and affiliated 
organizations with whom we spoke. Four large issuers of affinity 
cards, representing 91 percent of the market (as measured by 2012 
cardholders), said they did not actively market these cards to 
students--that is, they did not market on campus or specifically 
target students through direct mail, e-mail, print or broadcast media, 
or their other marketing venues.[Footnote 18] Representatives of five 
affiliated organizations with affinity credit card agreements 
corroborated these statements; they told us that the card issuers no 
longer marketed their affinity cards to students, focusing instead on 
alumni. The issuers noted that it was still possible that some 
students applied for college affinity cards because they would see the 
same marketing as the general public--such as advertising at bank 
branches, sporting events, or on issuer websites. Graduate students 
also may receive card solicitations from their undergraduate schools 
or alumni organizations. Officials from three affiliated organizations 
estimated that the percentage of their current cardholders who still 
were students was less than 3 percent and that these percentages had 
been declining. 

Before the enactment of the CARD Act in 2009, it was not uncommon for 
college affinity cards to be marketed to students. Representatives of 
four organizations with college affinity cards told us that at one 
time their cards were targeted to students, and, as discussed earlier, 
card agreements often specified students as a target market and 
required sharing student contact information for marketing purposes. 
However, many of the new agreements--and amendments to existing 
agreements--we reviewed that were put in place after 2009 expressly 
limit or restrict the marketing of college affinity cards to students. 

Views diverged on the extent to which the CARD Act was responsible for 
the decline in marketing of college affinity cards to students. One 
card issuer told us the act had little influence because the company 
had begun reducing marketing cards to students before the statute was 
enacted. A second issuer said it did not market to students because it 
sought more affluent customers, but it acknowledged the CARD Act also 
played a role by making it more difficult and less efficient to market 
to students--for example, placing restrictions on making prescreened 
credit offers to those under 21. Representatives of three 
organizations with college affinity cards told us they believed the 
CARD Act played a significant role in the decline of card marketing to 
students. Institutions of higher education also may have influenced 
this decline--for example, representatives of one college told us that 
undergraduate students were not included in its program or targeted 
for marketing, largely because the college did not want to be seen as 
pushing credit cards on its students. 

Marketing of college affinity cards overall--not just to students--has 
declined in recent years as many large issuers have diminished their 
presence in the marketplace. As discussed earlier, the number of 
agreements and cardholders declined by 41 percent and 40 percent, 
respectively, from 2009 through 2012. Three of the four affinity card 
issuers told us they were not actively seeking additional agreements. 
Specifically, one issuer said it was exiting the marketplace as 
existing agreements expired, one said it was evaluating the 
performance of its existing portfolio before deciding a future 
direction, and one said it was evaluating each agreement as it expired 
and did not regard its college affinity card business as strategically 
important. The fourth issuer noted that while it was seeking new 
agreements, it had ended many of its existing agreements because it 
did not see the program being sustainable over the long term. 

Although some card agreements provide payments to the affiliated 
organizations based on the number of card accounts, organizations told 
us they generally played a limited role in marketing the cards to 
their members. Three of the five organizations had sent e-mails to 
their members promoting the cards. One of these organizations told us 
it would like to do additional marketing of its own but that the 
issuer had been reluctant to permit this. Two organizations were 
concerned that participation in marketing could affect the tax status 
of their payments under the agreements.[Footnote 19] 

Marketing of Credit Cards Specifically to Students Has Declined, 
According to Issuers and Survey Data: 

Active marketing of college student credit cards appears to have 
declined in recent years. We spoke with five issuers of these cards, 
which represented 39 percent of all general-purpose credit cards in 
circulation as of December 2012.[Footnote 20] All the issuers told us 
that as of 2013, they did not rely on active marketing to students to 
solicit potential cardholders. Active marketing includes methods such 
as direct mail, telemarketing, or e-mail. Instead, interested students 
could learn about the cards through issuer or third-party websites and 
bank branch offices. 

Representatives of affiliated organizations with whom we spoke 
confirmed they had observed a reduction in the marketing of credit 
cards to students in recent years. For example, they noted that 
issuers no longer conducted on-campus solicitations at sporting events 
and other university functions, as they had in the past. Two 
organizations told us they believed the decline in marketing of 
college student credit cards began by the early or mid-2000s, while 
three others said it began around 2009, when the CARD Act was enacted. 

According to annual surveys of college students conducted by Student 
Monitor, a market research firm specializing in the college student 
market, the number of students obtaining a credit card in response to 
a solicitation through direct mail or on campus has dropped 
significantly in recent years.[Footnote 21] The proportion of students 
reporting that they obtained a credit card as a result of a direct 
mail solicitation declined from 36 percent in 2000 to 6 percent in 
2013 (see figure 5).[Footnote 22] In 2013, students reported receiving 
significantly fewer mail (1.6) and e-mail solicitations (1.4) in a 
typical month than respondents in 2007 (5.6 and 9.1, respectively). 
Two issuers told us the decline in direct mail resulted in part from 
restrictions in the CARD Act on prescreened credit offers to those 
under 21. In 2013, fewer than 1 percent of students obtained their 
credit card as a result of an on-campus display or a company 
representative on campus (a practice known as tabling), as compared 
with 15 percent and 6 percent, respectively, in 2000. Two issuers told 
us they still used on-campus marketing but that they focused on their 
other financial products, such as checking accounts, and no longer 
accepted credit card applications at on-campus events. 

Figure 5: Percentage of Students Obtaining Their Credit Cards, by 
Method of Solicitation, 2000 and 2013: 

[Refer to PDF for image: vertical bar graph] 

Method: Apply at bank; 
2000: 14%; 
2013: 48%. 

Method: Company Website; 
2000: [A]; 
2013: 13%. 

Method: 800 number/internet advertising/bookstore; 
2000: 8%; 
2013: 12%. 

Method: Mail offer; 
2000: 36%; 
2013: 6%. 

Method: E-mail offer; 
2000: [A]; 
2013: 4%. 

Method: Off-campus displays; 
2000: 6%; 
2013: 2%. 

Method: Telephone solicitation; 
2000: 4%; 
2013: 2%. 

Method: On-campus displays; 
2000: 15%; 
2013: 1%. 

Method: Tabling/On-campus rep or event[B]; 
2000: 6%; 
2013: 1%. 

Source: Student Monitor. 

[A] Data not available for 2000. 

[B] Tabling refers to staffing tables at a campus location to market 
credit cards to students. 

[End of figure] 

According to Student Monitor, more students have been acquiring their 
credit cards by initiating contact with the card issuer. For example, 
in 2013, 48 percent of students receiving a credit card applied in 
person at a bank (often the one with which they already had a deposit 
account), compared with 14 percent in 2000. Twenty-four percent 
received a card by initiating contact through the Internet or by 
telephone, compared with approximately 8 percent in 2000. 

Effect of College Affinity and Student Cards on Student Credit Card 
Debt Largely Is Unknown: 

Data are not available to definitively determine the effect that 
affinity cards and college student cards have had on student credit 
card debt. The effect of affinity cards may be limited because, as 
seen earlier, fewer students appear to hold these cards. The effect of 
college student cards is difficult to determine because the available 
data cover credit cards in general rather than college student cards 
in particular. However, students' overall use of credit cards appears 
to have declined in recent years. 

Limited Information Available on Effects of College Affinity and 
Student Credit Cards on Card Debt: 

Publicly available data do not allow a clear determination of the 
impact of college affinity and college student cards on student credit 
card debt. One limiting factor is that card issuers do not always ask 
on applications or know which of their cardholders are students. 
Additionally, while some data exist about the age of credit 
cardholders, age is not a reliable proxy for student status, 
especially as the age of college students has increased in recent 
years.[Footnote 23] Multiple studies have examined the factors 
influencing credit card use among students, but none that we 
identified focused specifically on the impact of college affinity or 
college student credit cards on student debt. For example, a 2012 
study that examined the effect of the CARD Act reviewed affinity card 
agreements and surveyed college students on their use of credit cards, 
but it did not seek to determine the impact of particular types of 
credit cards.[Footnote 24] Similarly, surveys on student credit card 
use by Sallie Mae (a financial services company specializing in 
education) and Student Monitor, discussed later in this report, asked 
respondents about general credit card use but not specifically about 
affinity or college student credit cards. 

College Affinity Cards: 

The effect of affinity cards on student credit card debt may be 
limited because fewer students appear to hold these cards, which 
generally have not been marketed specifically to college students 
since at least 2009. Representatives of two organizations with 
affinity cards estimated that 1 percent or less of their current 
cardholders were students, while a third organization estimated that 3 
percent were students. The proportion of affinity cards held by 
students appears to have declined since the cards' introduction. For 
example, one organization estimated that in the past, up to 15 percent 
of its cardholders were students, but that virtually none were at 
present. 

However, the exact prevalence of students holding affinity credit 
cards is not known. While the CARD Act requires issuers to submit 
information on college affinity card programs, including the number of 
cardholders, to CFPB, issuers are not required to report on the number 
of student cardholders. Three affinity card issuers with whom we spoke 
said that they could not identify which cardholders were students, or 
they considered cardholder information proprietary and therefore 
declined to share the information. 

College Student Credit Cards: 

We did not identify data that would allow a determination of the 
effect of college student credit cards in particular--as distinct from 
credit cards in general--on student credit card debt. Representatives 
of CFPB, researchers, and organizations that have studied credit card 
use told us that they were not aware of research or data sets specific 
to college student credit cards. While banks file quarterly reports 
with regulators that contain information on the banks' credit card 
portfolios, these reports do not differentiate by type of card. 
[Footnote 25] Similarly, The Nilson Report, an industry trade journal 
that reports on credit cards, has not issued a report specific to 
student credit cards in more than 10 years. Four issuers of college 
student credit cards told us they were unable to share specific 
information on these cards or the student holders of their other 
credit cards because the information was not available or they 
considered such information proprietary.[Footnote 26] Even if 
comprehensive data on college student credit cards existed, the data's 
value for understanding student credit card debt would be limited 
because many cardholders could continue to use their student cards 
after they ceased being students. 

Students' Overall Use of Credit Cards Appears to Have Declined: 

While data specific to college affinity and college student credit 
cards are limited, available evidence suggests college students' use 
of credit cards overall has declined in recent years. Annual surveys 
of college students conducted by Sallie Mae and Student Monitor 
represent two primary sources of information on student credit card 
use.[Footnote 27] 

Number of Students with Credit Cards: 

The two studies suggest that the number of students owning credit 
cards declined in recent years. Student Monitor found that the 
proportion of college students holding credit cards declined from 53 
percent in 2004 to 33 percent in 2013.[Footnote 28] Sallie Mae 
reported the proportion of students owning credit cards decreased from 
49 percent in 2010 (the first year it began collecting this 
information) to 29 percent in 2013 (see figure 6).[Footnote 29] In the 
Student Monitor study, 72 percent of students who had a credit card in 
their own name in 2013 owned a single card, 21 percent had two credit 
cards, and 8 percent had three or more credit cards. 

Figure 6: Percent of Students Who Reported Owning a Credit Card, 2010-
2013: 

[Refer to PDF for image: multiple line graph] 

Year: 2010; 
Sallie Mae (students respondents): 49%; 
Student monitor: 47%. 

Year: 2011; 
Sallie Mae (students respondents): 40%; 
Student monitor: 42%. 

Year: 2012; 
Sallie Mae (students respondents): 39%; 
Student monitor: 36%. 

Year: 2013; 
Sallie Mae (students respondents): 29%; 
Student monitor: 33%. 

Source: GAO analysis of Sallie Mae and Student Monitor reports. 

[End of figure] 

CFPB and the Federal Reserve Bank of Richmond similarly reported a 
decline in credit card ownership among younger consumers. In a 2013 
CFPB survey of major credit card issuers, new cards issued to those 
under 21 dropped from 3.9 million in 2007 to 1.7 million in 2012 (a 56 
percent reduction). The percentage of consumers ages 18-20 who opened 
a credit card account dropped from 33.6 percent to 14.4 percent during 
that period.[Footnote 30] The study by the Federal Reserve Bank of 
Richmond analyzed consumer credit data and found that individuals 
under 21 were 8 percentage points less likely to have a credit card 
after the CARD Act than before it became law in 2009.[Footnote 31] 

At the same time, students who get credit cards in their own names--
that is, the students receive the bill and are responsible for 
payment--increasingly have been doing so before starting college. 
According to Student Monitor, 56 percent of students in 2013 obtained 
their first credit card before starting college--29 percent in high 
school or earlier, and 27 percent between high school and college (see 
figure 7).[Footnote 32] In contrast, in 2000, students were more 
likely to get their first credit card when they already were in 
college. 

Figure 7: Time Period of Credit Card Acquisition for Students with 
Credit Cards, 2000 and 2013: 

[Refer to PDF for image: vertical bar graph] 

Acquisition period: In high school or earlier; 
2000: 14%; 
2013: 29%. 

Acquisition period: Between high school and college; 
2000: 20%; 
2013: 27%. 

Acquisition period: College freshman; 
2000: 46%; 
2013: 15%. 

Acquisition period: College sophomore; 
2000: 14%; 
2013: 12%. 

Acquisition period: After sophomore year of college; 
2000: 5%; 
2013: 11%. 

Source: Student Monitor. 

Note: The data above include only those credit cards for which the 
student is responsible for payment. 

[End of figure] 

While students' use of credit cards appears to have declined, their 
use of debit cards has increased. According to Student Monitor, 63 
percent of students had a debit card in 2013, as compared with 59 
percent in 2008 and 51 percent in 2000. Representatives of the 
financial industry and a researcher told us that the recent financial 
crisis has made many students and younger people more wary of credit 
and thus more disposed to using prepaid and debit cards. Student 
Monitor found that 62 percent of students interviewed in 2013 said 
they feared getting into credit card debt. 

Charges and Balances: 

Forty-five percent of all students with a credit card in their name 
charged $100 or less each month in 2013, according to Student Monitor. 
Fifty-nine percent used their card fewer than six times a month, 
including 8 percent who indicated that they did not usually use their 
credit card each month. On average, students charged $171 monthly, 
a decrease of 8 percent from 2012.

Sallie Mae reported that students' median reported balance for all 
cardholders was $179 in 2013, as compared with $289 in 2011. The 
survey also found that 2 percent of all students in 2013 with a credit 
card had a combined outstanding balance of more than $4,000, while 29 
percent had a zero balance. Student Monitor found that the 28 percent 
of respondents who carried a balance had a median outstanding balance 
of $136. 

Credit Limits: 

Credit limits for credit cards owned by students usually are lower 
than those for the general population and have been decreasing. In 
2010, the median credit limit for all bank-type general credit cards 
was $15,000.[Footnote 33] In contrast, Student Monitor found that more 
than 60 percent of credit cards owned by students had credit limits of 
$500 or less, and 80 percent were $1,000 or less. In 2000, 27 percent 
of respondents had credit limits of $1,000 or less, and 11 percent had 
limits of at least $5,000. However, because students may have multiple 
credit cards, their total credit card debt can be higher than the 
credit limit of any one card. 

Payment and Delinquency Patterns: 

Several studies provide information on college students' payment 
patterns for credit cards: 

* Payment amount. Student Monitor found that 72 percent of students 
reported paying their outstanding charges in full each month in 2013. 
Sallie Mae found that 52 percent of student respondents in 2013 paid 
in full each month in the previous year, and that 10 percent of 
students typically made only the minimum payment.[Footnote 34] 

* Parental responsibility. The Student Monitor and Sallie Mae studies 
found that the college student, rather than the parent, was most often 
responsible for making credit card payments (79 percent in the Student 
Monitor study and 92 percent in the Sallie Mae study). 

* Late payment fees. One quarter of students in the 2013 Student 
Monitor study reported paying a late payment fee at least once since 
acquiring a credit card, with almost half of that group incurring more 
than one late fee. 

* Delinquent payment. Cardholders under 21 were more likely to 
experience minor delinquencies (30 or 60 days past due) than older 
cardholders, according to the Federal Reserve Bank of Richmond 
study.[Footnote 35] At the same time, young cardholders were 
substantially less likely to experience serious delinquency (90 days 
past due and longer). The study also found that cardholders who got 
their credit cards earlier in life were less likely to experience a 
serious default later in life. 

Agency Comments: 

We provided a draft of this report to CFPB and the Federal Reserve. We 
incorporated technical comments from these agencies as appropriate. 

We are sending copies of this report to the appropriate congressional 
committees, CFPB, the Federal Reserve, and other interested parties. 
In addition, the report will be available at no charge on our website 
at [hyperlink, http://www.gao.gov]. 

If you or your staff have any questions about this report, please 
contact me at (202) 512-8678 or cackleya@gao.gov. Contact points for 
our Offices of Congressional Relations and Public Affairs may be found 
on the last page of this report. GAO staff who made key contributions 
to this report are listed in appendix II. 

Signed by: 

Alicia Puente Cackley: 
Director, Financial Markets and Community Investment: 

[End of section] 

Appendix I: Objectives, Scope, and Methodology: 

This report examines (1) the trends associated with and 
characteristics of college affinity card agreements, (2) the extent of 
marketing for college affinity and college student credit cards, and 
(3) what is known about the effect of the use of affinity cards and 
student credit cards on student credit card debt. We use "college 
affinity card" to refer to a credit card issued in conjunction with an 
agreement between a credit card issuer and an institution of higher 
education or an affiliated organization (such as an alumni association 
or foundation). We use "college student credit card" to refer to a 
credit card established for and targeted to college students. 

To identify the trends and general characteristics associated with 
college affinity card agreements, we reviewed the 2010 and 2011 Report 
to the Congress on College Credit Card Agreements, which the Board of 
Governors of the Federal Reserve System (Federal Reserve) issued, and 
the 2012 and 2013 College Credit Card Agreements: Annual Report to 
Congress, which the Bureau of Consumer Financial Protection (also 
known as the Consumer Financial Protection Bureau or CFPB) issued. 
[Footnote 36] These reports provide summary information, such as the 
total number of agreements in effect and number of accounts open at 
the end of the year.[Footnote 37] 

To determine the characteristics of the agreements, we first reviewed 
and analyzed affinity card agreements between issuers and schools or 
affiliated organizations from calendar years 2009-2012. We downloaded 
information for all those agreements in effect during those years from 
public databases managed by the Federal Reserve and CFPB.[Footnote 38] 
We analyzed the agreements to identify general trends and 
characteristics. We assessed these data by interviewing Federal 
Reserve and CFPB staff knowledgeable about the data and checking the 
data for illogical values or obvious errors. We found the data to be 
sufficiently reliable for describing the general characteristics and 
trends of the affinity card marketplace. 

Because we were most interested in current agreements, we focused our 
analysis on the agreements from 2011, the most recent year for which 
information was available. Twenty providers issued these agreements. 
[Footnote 39] For a more thorough analysis, we selected a 
nonprobability sample of 39 agreements from 574 agreements identified 
as being in effect as of January 1, 2012.[Footnote 40] We determined 
the sample by applying three criteria to the agreements. First, we 
included the 25 largest agreements overall, as measured by the number 
of cardholders. Second, we included the largest agreement from each 
issuer that provided affinity credit cards.[Footnote 40] Third, we 
included the five largest agreements with institutions of higher 
education, as measured by the number of cardholders under those 
agreements. These numbers do not add to 39 because agreements could 
meet criteria for inclusion under more than one category. We selected 
these criteria because we wanted to capture a large proportion of 
affinity cardholders as well as any potential variation among issuers 
or organizational type. We included the five largest institutions of 
higher education because we anticipated that those agreements could be 
more likely to include students as cardholders, a topic of specific 
interest. See table 8 for the list of reviewed agreements. 

Table 8: 2011 College Credit Card Agreements Selected for Review, by 
Institution Type, Issuer, and Size Categories: 

Institution or organization: Penn State Alumni Association; 
Type of institution or organization: Alumni association; 
Credit card issuer: FIA Card Services, N.A.; 
Largest 25 agreements, by number of cardholders: Yes; 
Largest agreement for issuer, by number of cardholders: Yes; 
Largest five agreements with universities by number of cardholders: No. 

Institution or organization: Golden Key International Honour Society; 
Type of institution or organization: Other; 
Credit card issuer: FIA Card Services, N.A.; 
Largest 25 agreements, by number of cardholders: Yes; 
Largest agreement for issuer, by number of cardholders: No; 
Largest five agreements with universities by number of cardholders: No. 

Institution or organization: Alumni Association of the University of 
Michigan; 
Type of institution or organization: Alumni association; 
Credit card issuer: FIA Card Services, N.A.; 
Largest 25 agreements, by number of cardholders: Yes; 
Largest agreement for issuer, by number of cardholders: No; 
Largest five agreements with universities by number of cardholders: No. 

Institution or organization: Association of Former Students of Texas AM 
University; 
Type of institution or organization: Alumni association; 
Credit card issuer: FIA Card Services, N.A.; 
Largest 25 agreements, by number of cardholders: Yes; 
Largest agreement for issuer, by number of cardholders: No; 
Largest five agreements with universities by number of cardholders: No. 

Institution or organization: The Ex-Students Association of the 
University of Texas; 
Type of institution or organization: Alumni association; 
Credit card issuer: FIA Card Services, N.A.; 
Largest 25 agreements, by number of cardholders: Yes; 
Largest agreement for issuer, by number of cardholders: No; 
Largest five agreements with universities by number of cardholders: No. 

Institution or organization: Indiana University Alumni Association; 
Type of institution or organization: Alumni association; 
Credit card issuer: FIA Card Services, N.A.; 
Largest 25 agreements, by number of cardholders: Yes; 
Largest agreement for issuer, by number of cardholders: No; 
Largest five agreements with universities by number of cardholders: No. 

Institution or organization: UCLA Alumni Association; 
Type of institution or organization: Alumni association; 
Credit card issuer: FIA Card Services, N.A.; 
Largest 25 agreements, by number of cardholders: Yes; 
Largest agreement for issuer, by number of cardholders: No; 
Largest five agreements with universities by number of cardholders: No. 

Institution or organization: Wisconsin Alumni Association; 
Type of institution or organization: Alumni association; 
Credit card issuer: FIA Card Services, N.A.; 
Largest 25 agreements, by number of cardholders: Yes; 
Largest agreement for issuer, by number of cardholders: No; 
Largest five agreements with universities by number of cardholders: No. 

Institution or organization: University of Southern California; 
Type of institution or organization: University; 
Credit card issuer: FIA Card Services, N.A.; 
Largest 25 agreements, by number of cardholders: Yes; 
Largest agreement for issuer, by number of cardholders: No; 
Largest five agreements with universities by number of cardholders: 
Yes. 

Institution or organization: The University of Georgia Foundation; 
Type of institution or organization: Foundation; 
Credit card issuer: FIA Card Services, N.A.; 
Largest 25 agreements, by number of cardholders: Yes; 
Largest agreement for issuer, by number of cardholders: No; 
Largest five agreements with universities by number of cardholders: No. 

Institution or organization: California Alumni Association; 
Type of institution or organization: Alumni association; 
Credit card issuer: FIA Card Services, N.A.; 
Largest 25 agreements, by number of cardholders: Yes; 
Largest agreement for issuer, by number of cardholders: No; 
Largest five agreements with universities by number of cardholders: No. 

Institution or organization: General Alumni Association of University 
of North Carolina at Chapel Hill; 
Type of institution or organization: Alumni association; 
Credit card issuer: FIA Card Services, N.A.; 
Largest 25 agreements, by number of cardholders: Yes; 
Largest agreement for issuer, by number of cardholders: No; 
Largest five agreements with universities by number of cardholders: No. 

Institution or organization: Purdue Alumni Association; 
Type of institution or organization: Alumni association; 
Credit card issuer: Purdue Federal Credit Union; 
Largest 25 agreements, by number of cardholders: Yes; 
Largest agreement for issuer, by number of cardholders: Yes; 
Largest five agreements with universities by number of cardholders: No. 

Institution or organization: University of Puerto Rico; 
Type of institution or organization: University; 
Credit card issuer: Banco Popular de Puerto Rico; 
Largest 25 agreements, by number of cardholders: Yes; 
Largest agreement for issuer, by number of cardholders: Yes; 
Largest five agreements with universities by number of cardholders: 
Yes. 

Institution or organization: State University of Iowa Alumni 
Association; 
Type of institution or organization: Alumni association; 
Credit card issuer: FIA Card Services, N.A.; 
Largest 25 agreements, by number of cardholders: Yes; 
Largest agreement for issuer, by number of cardholders: No; 
Largest five agreements with universities by number of cardholders: No. 

Institution or organization: The Ohio State University Alumni 
Association, Inc.; 
Type of institution or organization: Alumni association; 
Credit card issuer: FIA Card Services, N.A.; 
Largest 25 agreements, by number of cardholders: Yes; 
Largest agreement for issuer, by number of cardholders: No; 
Largest five agreements with universities by number of cardholders: No. 

Institution or organization: Stanford Alumni Association; 
Type of institution or organization: Alumni association; 
Credit card issuer: FIA Card Services, N.A.; 
Largest 25 agreements, by number of cardholders: Yes; 
Largest agreement for issuer, by number of cardholders: No; 
Largest five agreements with universities by number of cardholders: No. 

Institution or organization: Phi Theta Kappa International Honor 
Society; 
Type of institution or organization: Other; 
Credit card issuer: FIA Card Services, N.A.; 
Largest 25 agreements, by number of cardholders: Yes; 
Largest agreement for issuer, by number of cardholders: No; 
Largest five agreements with universities by number of cardholders: No. 

Institution or organization: Auburn Spirit Foundation; 
Type of institution or organization: Foundation; 
Credit card issuer: FIA Card Services, N.A.; 
Largest 25 agreements, by number of cardholders: Yes; 
Largest agreement for issuer, by number of cardholders: No; 
Largest five agreements with universities by number of cardholders: No. 

Institution or organization: Iowa State University Alumni Association; 
Type of institution or organization: Alumni association; 
Credit card issuer: FIA Card Services, N.A.; 
Largest 25 agreements, by number of cardholders: Yes; 
Largest agreement for issuer, by number of cardholders: No; 
Largest five agreements with universities by number of cardholders: No. 

Institution or organization: National Alumni Association of the 
University of Alabama; 
Type of institution or organization: Alumni association; 
Credit card issuer: FIA Card Services, N.A.; 
Largest 25 agreements, by number of cardholders: Yes; 
Largest agreement for issuer, by number of cardholders: No; 
Largest five agreements with universities by number of cardholders: No. 

Institution or organization: Clemson University, Inc.; 
Type of institution or organization: Alumni association; 
Credit card issuer: FIA Card Services, N.A.; 
Largest 25 agreements, by number of cardholders: Yes; 
Largest agreement for issuer, by number of cardholders: No; 
Largest five agreements with universities by number of cardholders: No. 

Institution or organization: University of Arizona Alumni Association; 
Type of institution or organization: Alumni association; 
Credit card issuer: FIA Card Services, N.A.; 
Largest 25 agreements, by number of cardholders: Yes; 
Largest agreement for issuer, by number of cardholders: No; 
Largest five agreements with universities by number of cardholders: No. 

Institution or organization: Kansas State University Alumni 
Association; 
Type of institution or organization: Alumni; 
Credit card issuer: INTRUST Bank, N.A.; 
Largest 25 agreements, by number of cardholders: Yes; 
Largest agreement for issuer, by number of cardholders: Yes; 
Largest five agreements with universities by number of cardholders: No. 

Institution or organization: Trustees of the University of 
Pennsylvania; 
Type of institution or organization: University; 
Credit card issuer: FIA Card Services, N.A.; 
Largest 25 agreements, by number of cardholders: Yes; 
Largest agreement for issuer, by number of cardholders: No; 
Largest five agreements with universities by number of cardholders: 
Yes. 

Institution or organization: Virginia Tech Alumni Association; 
Type of institution or organization: Alumni association; 
Credit card issuer: Chase Bank USA, N.A.; 
Largest 25 agreements, by number of cardholders: No; 
Largest agreement for issuer, by number of cardholders: Yes; 
Largest five agreements with universities by number of cardholders: No. 

Institution or organization: Harvard Alumni Association; 
Type of institution or organization: Alumni association; 
Credit card issuer: Barclays Bank Delaware; 
Largest 25 agreements, by number of cardholders: No; 
Largest agreement for issuer, by number of cardholders: Yes; 
Largest five agreements with universities by number of cardholders: No. 

Institution or organization: Boston University; 
Type of institution or organization: Alumni association; 
Credit card issuer: U.S. Bank National Association ND; 
Largest 25 agreements, by number of cardholders: No; 
Largest agreement for issuer, by number of cardholders: Yes; 
Largest five agreements with universities by number of cardholders: No. 

Institution or organization: University of Illinois Alumni Association; 
Type of institution or organization: Alumni association; 
Credit card issuer: University of Illinois Employees Credit Union; 
Largest 25 agreements, by number of cardholders: No; 
Largest agreement for issuer, by number of cardholders: Yes; 
Largest five agreements with universities by number of cardholders: No. 

Institution or organization: Western Michigan Alumni Association; 
Type of institution or organization: Alumni association; 
Credit card issuer: PNC Bank, National Association; 
Largest 25 agreements, by number of cardholders: No; 
Largest agreement for issuer, by number of cardholders: Yes; 
Largest five agreements with universities by number of cardholders: No. 

Institution or organization: Michigan State University; 
Type of institution or organization: University; 
Credit card issuer: Michigan State University Federal Credit Union; 
Largest 25 agreements, by number of cardholders: No; 
Largest agreement for issuer, by number of cardholders: Yes; 
Largest five agreements with universities by number of cardholders: No. 

Institution or organization: Georgia Tech Alumni Association; 
Type of institution or organization: Alumni association; 
Credit card issuer: Capital One, N.A.; 
Largest 25 agreements, by number of cardholders: No; 
Largest agreement for issuer, by number of cardholders: Yes; 
Largest five agreements with universities by number of cardholders: No. 

Institution or organization: Association of Graduates of the United 
States Air Force Academy; 
Type of institution or organization: Alumni association; 
Credit card issuer: USAA Savings Bank; 
Largest 25 agreements, by number of cardholders: No; 
Largest agreement for issuer, by number of cardholders: Yes; 
Largest five agreements with universities by number of cardholders: No. 

Institution or organization: Boston College; 
Type of institution or organization: University; 
Credit card issuer: GE Money Bank; 
Largest 25 agreements, by number of cardholders: No; 
Largest agreement for issuer, by number of cardholders: Yes; 
Largest five agreements with universities by number of cardholders: No. 

Institution or organization: The Principia; 
Type of institution or organization: Alumni association; 
Credit card issuer: UMB Bank, N.A.; 
Largest 25 agreements, by number of cardholders: No; 
Largest agreement for issuer, by number of cardholders: Yes; 
Largest five agreements with universities by number of cardholders: No. 

Institution or organization: Coastal Carolina University; 
Type of institution or organization: University; 
Credit card issuer: Carolina Trust FCU; 
Largest 25 agreements, by number of cardholders: No; 
Largest agreement for issuer, by number of cardholders: Yes; 
Largest five agreements with universities by number of cardholders: No. 

Institution or organization: University of West Florida Foundation Inc; 
Type of institution or organization: Foundation; 
Credit card issuer: Pen Air Federal Credit Union; 
Largest 25 agreements, by number of cardholders: No; 
Largest agreement for issuer, by number of cardholders: Yes; 
Largest five agreements with universities by number of cardholders: No. 

Institution or organization: The Trustees of Columbia University; 
Type of institution or organization: University; 
Credit card issuer: FIA Card Services, N.A.; 
Largest 25 agreements, by number of cardholders: No; 
Largest agreement for issuer, by number of cardholders: No; 
Largest five agreements with universities by number of cardholders: 
Yes. 

Institution or organization: St Johns University New York; 
Type of institution or organization: University; 
Credit card issuer: FIA Card Services, N.A.; 
Largest 25 agreements, by number of cardholders: No; 
Largest agreement for issuer, by number of cardholders: No; 
Largest five agreements with universities by number of cardholders: 
Yes. 

Institution or organization: Total; 
Largest 25 agreements, by number of cardholders: 25; 
Largest agreement for issuer, by number of cardholders: 16; 
Largest five agreements with universities by number of cardholders: 5. 

Source: GAO analysis of CFPB data. 

[A] FIA Card Services, N.A. is a subsidiary of Bank of America. 

[End of table] 

Collectively, the agreements included in our sample covered about 38 
percent of all cardholders in 2011. Twenty-six of the reviewed 
agreements were with alumni associations, 8 were with institutions of 
higher education, 3 were with foundations, and 2 were with other 
organizations. 

We reviewed these agreements and collected information using a data 
collection instrument (DCI) to gather characteristics such as their 
effective date, duration, allowed marketing practices and target 
populations, payments to the organization, consumer protections, and 
service standards. Findings from this limited review of 39 agreements 
cannot be generalized to the overall population of agreements in 2011. 

We developed the DCI after reviewing some of the 2011 agreements, 
focusing on items such as the scope, consumer protections, marketing 
practices, payments, terms, and fees. We converted the DCI to a pdf 
format for direct data entry. Three team members entered information 
on two agreements each using the DCI and discussed their experiences. 
We revised some questions for clarity and deleted others to avoid 
duplication. This version of the DCI was reviewed by a GAO survey 
specialist and an expert who surveyed students regarding their credit 
card use and conducted a similar review of the credit card agreements, 
and we incorporated minor changes. We further clarified that the 
review of agreements would focus on the most recent full agreement or 
amendment and those items that were still in effect as of January 1, 
2012. Two team members then entered information about the agreements 
into the DCI. We verified our coding by comparing the original coder's 
DCI responses with those of the second coder. For each comparison set, 
we compared the coding for 59 data elements and found discrepancies in 
fewer than 10 percent of the entries. This was determined to ensure a 
base level of reliability in the information collected. While the 
results of our review of the 39 agreements cannot be projected 
nationwide, they provide context and information related to the 
contents of the 39 agreements. 

To address the second and third objectives, we reviewed documents and 
interviewed representatives of credit card issuers, organizations and 
schools with affinity card agreements, and federal agencies, as well 
as academics and other individuals who have studied credit cards and 
their use by students. We reviewed studies--such as those by Sallie 
Mae (a financial services company specializing in education), Student 
Monitor (a market research firm that specializes in the college 
student market), and U.S. Public Interest Research Group (a consumer 
advocacy organization)--on student credit card use. We identified 
these studies through the Econ Lit database and general Internet 
searches using terms such as "college credit cards." We focused on 
several years of Sallie Mae's How America Pays for College studies and 
on Student Monitor's Financial Services - Spring 2013 report, as well 
as recent reports by CFPB and the Federal Reserve Bank of Richmond. 
[Footnote 42] We assessed the quality of the survey data by 
interviewing Student Monitor and Sallie Mae officials knowledgeable 
about the data and checked the data for illogical values or obvious 
errors. We found the data to be of sufficient quality and reliability 
for providing general information on student credit card use. 
According to the Student Monitor, the estimates from the 2013 study 
had a 2.4 percent margin of error at the 95 percent confidence level. 
Because surveys are based on self-reporting of payment behaviors and 
estimated credit card debt levels, they may be prone to biases and not 
accurately represent actual behaviors and debt levels. The surveys 
were not designed to verify that information. Some researchers 
maintain that respondents sometimes underreport the quantity or level 
of characteristics that could be considered unflattering, such as the 
amount of outstanding credit card debt. We also reviewed marketing 
materials issuers used to market the cards. Lastly, we reviewed 
provisions of the Credit Card Accountability Responsibility and 
Disclosure Act of 2009 related to affinity credit cards and credit 
card use by those under 21.[Footnote 43] 

We interviewed representatives of four issuers of affinity credit 
cards--Bank of America (FIA Services), Capital One, Chase, and U.S. 
Bank--that had 91 percent of such cardholders in 2012. We also 
interviewed representatives of the five largest general credit card 
issuers, measured by 2011 portfolio size, as reported by The Nilson 
Report.[Footnote 44] We discussed with these issuers--American 
Express, Bank of America (FIA Services), Chase, Citibank, and Wells 
Fargo--any student credit cards currently or previously issued. To get 
a broader perspective on the use of these cards by financial 
institutions, we also interviewed representatives of three industry 
trade groups--the American Bankers Association, the Consumer Bankers 
Association, and the Credit Union National Association. 

We also interviewed representatives of six organizations and schools 
to discuss their affinity credit card relationships--the Association 
of Former Students of Texas A&M University, Boston University Alumni 
Association, Georgia Tech Alumni Association, Golden Key International 
Honour Society, Penn State Alumni Association, and Washington 
University. These six organizations were chosen because they had among 
the largest number of affinity cards (as determined by number of 
cardholders), had cards from the three affinity card issuers with the 
most agreements, and included one organization (Washington University) 
that had previously chosen to end its affinity agreement. To get a 
broader perspective, we also interviewed representatives of the 
National Association of College and University Business Officers. 

In addition, we interviewed representatives of CFPB, the Department of 
Education, the Federal Reserve, and the Office of the Comptroller of 
the Currency to discuss their oversight of affinity and student credit 
cards and trends they have observed in the industry. We talked with 
two academics who have studied and written about student credit card 
use, as well as representatives of Sallie Mae, Student Monitor, and 
the U.S. Public Interest Research Group. 

We conducted this performance audit from December 2012 to February 
2014 in accordance with generally accepted government auditing 
standards. Those standards require that we plan and perform the audit 
to obtain sufficient, appropriate evidence to provide a reasonable 
basis for our findings and conclusions based on our audit objectives. 
We believe that the evidence obtained provides a reasonable basis for 
our findings and conclusions based on our audit objectives. 

[End of section] 

Appendix II: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

Alicia Puente Cackley, (202) 512-8678 or cackleya@gao.gov: 

Staff Acknowledgments: 

In addition to the contact named above, individuals making key 
contributions to this report were Jason Bromberg, Assistant Director; 
Amy Anderson; Kevin Averyt; Daniel Newman; Christopher H. Schmitt; and 
Michelle St. Pierre. In addition, key support was provided by Bethany 
M. Benitez; Kenneth Bombara; William Chatlos; Barbara Roesmann; and 
Jena Sinkfield. 

[End of section] 

Footnotes: 

[1] We conducted a separate review on debit and prepaid cards offered 
to students through agreements between schools and financial service 
providers. GAO, College Debit Cards: Actions Needed to Address ATM 
Access, Student Choice, and Transparency, [hyperlink, 
http://www.gao.gov/products/GAO-14-91] (Washington, D.C.: Feb. 13, 
2014). 

[2] Pub. L. No. 111-24, 123 Stat. 1734. 

[3] § 305(a), 123 Stat. at 1749-50 (codified at 15 U.S.C. § 
1637(r)(2)). 

[4] The CARD Act mandates that we review the annual reports submitted 
by card issuers as well as their marketing practices to determine the 
impact that college affinity card agreements and college student card 
agreements have on credit card debt. § 305(b), 123 Stat. at 1750-51. 

[5] Results from nonprobability samples cannot be used to make 
inferences about a population, because in a nonprobability sample some 
elements of a population being studied have no chance or an unknown 
chance of being selected as part of the sample. 

[6] Sallie Mae originates and services loans to and collects loans 
from students and families to help them finance the cost of their 
education. Student Monitor is a market research firm focused 
exclusively on the student marketplace. 

[7] The Nilson Report, no. 1012 (February 2013). 

[8] Largest credit card issuers as measured by the number of general-
purpose credit cards in circulation in 2012, the most recent year for 
which data were available, according to The Nilson Report, no. 1012 
(February 2013). The six issuers were Capital One Financial 
Corporation, Citigroup Inc., Bank of America Corporation, Discover 
Financial Services, U.S. Bancorp, Wells Fargo & Company, and Barclays 
Bank Delaware. 

[9] We previously reported on college students' credit card use in 
2001. See GAO, Consumer Finance: College Students and Credit Cards, 
[hyperlink, http://www.gao.gov/products/GAO-01-773] (Washington, D.C.: 
June 20, 2001). 

[10] Pub. L. No. 111-24, §§ 301-304, 123 Stat. 1734,1747-49. 

[11] § 305(a); 12 C.F.R. § 1026.57(d). Implementation of the CARD Act, 
including receipt of the issuer submissions, was vested originally 
with the Federal Reserve but transferred to CFPB on July 21, 2011, 
pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection 
Act, Pub. L. No. 111-203, 124 Stat. 1376 (2010). 

[12] § 305(a): 12 C.F.R. § 1026.57(d). Issuers also must provide the 
number of new cardholders who opened accounts during the year, and any 
memorandum of understanding between the issuer and school or 
affiliated organization that directly or indirectly relates to any 
aspect of the agreement. Id. 

[13] § 305(a). The Federal Reserve submitted the 2009 and 2010 
reports, and CFPB submitted the 2011 and 2012 reports. 

[14] We counted two entities that filed agreements separately-Capital 
One Bank (USA), N.A. and Capital One, N.A.-as a single issuer because 
both are subsidiaries of Capital One Financial Corporation. 

[15] Because some agreements include the provision of financial 
products (such as deposit accounts) in addition to credit cards, 
payments made by issuers under these agreements may not relate solely 
to credit card accounts. 

[16] Many of the agreements we reviewed contained multiple amendments 
or addendums. We focused our review on the most recent full agreement 
or amendment and those items that were still in effect. See appendix I 
for a list of the agreements we reviewed. 

[17] As discussed later, while many agreements allow students to be a 
target market for the affinity cards, all of the issuers and 
affiliated organizations with which we spoke told us that, in 
practice, no issuers actively market to students at the present time. 

[18] One of the four issuers noted that because it was planning to 
exit the college affinity card marketplace, it was no longer marketing 
its affinity credit cards to any population. 

[19] An organization that is recognized as tax exempt may still be 
liable for tax on its unrelated business income, which is income from 
an activity that is not substantially related to the educational, 
charitable, or other purpose that is the basis of the organization's 
exemption. 

[20] The Nilson Report. Because we did not identify an aggregate data 
source specifically for college student credit cards, it is not known 
what proportion of that market these issuers represent. In addition, 
representatives of one of the five issuers told us they did not 
consider their card to be a college student credit card, but we 
counted it as such because the card was expressly labeled and marketed 
as being for college students. 

[21] Since 1996, Student Monitor annually has issued a report on 
student financial services based on in-person, on-campus interviews of 
1,200 undergraduate students enrolled full-time at 100 4-year colleges 
and universities throughout the United States. According to Student 
Monitor, the 2013 study had a 2.4 percent margin of error with a 95 
percent confidence interval. 

[22] We reported the 2000 data from Student Monitor in [hyperlink, 
http://www.gao.gov/products/GAO-01-773], p. 19. 

[23] For example, the percentage of students at degree-granting 
institutions of higher education who were age 25 or older increased 
from 41 percent in 2005 to 43 percent in 2010. GAO analysis of 
Department of Education, National Center for Education Statistics, 
NCES 2012-001, Digest of Education Statistics, 2011. 

[24] Jim Hawkins, "The CARD Act on Campus," Washington and Lee Law 
Review, vol. 69, no. 3 (2012). 

[25] Insured commercial banks must submit to their federal regulators 
(quarterly) a Consolidated Report of Condition and Income, known as a 
Call Report, which includes a comprehensive balance sheet and income 
statement, including income generated by credit card portfolios. 

[26] CFPB has access to de-identified, account-level information from 
some issuers; those data are housed with a third-party contractor that 
provides data warehousing and analytics in the credit card market. 
However, according to CFPB staff, while some credit card issuers 
indicate accounts that are student credit cards, comprehensive 
information specifically on student cardholders is not available. We 
have ongoing work related to CFPB's data collection and its privacy 
and security procedures. 

[27] Sallie Mae's annual study, which has produced information on 
college students' credit card use since 2010, uses telephone 
interviews of a sample of undergraduate students who are 18-24 years 
old and an unrelated sample of parents of such students. Eight hundred 
students were interviewed for the 2013 study. The Student Monitor 
study uses in-person, on-campus interviews of 1,200 college students 
enrolled full-time at 100 four-year colleges and universities 
throughout the United States. The firm's Financial Services report has 
included information on student credit card use since 1996. Because 
the surveys are based on self-reporting of payment behaviors and 
estimated credit card debt levels, they may be prone to biases and not 
accurately represent actual behaviors and debt levels. The surveys 
were not designed to verify that information. Some researchers 
maintain that respondents sometimes underreport the quantity or level 
of characteristics that could be considered unflattering, such as the 
amount of outstanding credit card debt. 

[28] Student Monitor, Financial Services - Spring 2013 (Ridgewood, 
N.J.: June 2013). Overall credit card ownership includes cards the 
students own and those for which they have permission to use 
(typically, parents' cards). The number of students who had a credit 
card in their name similarly declined--from 46 percent in 2004 to 26 
percent in 2013. 

[29] Sallie Mae and Ipsos Public Affairs, How America Pays for College 
2013: Sallie Mae's National Study of College Students and Parents 
(Newark, Del.: 2013) and Sallie Mae, How America Pays for College 
2010: Sallie Mae's National Study of College Students and Parents 
Conducted by Gallup (Reston, Va.: 2010). 

[30] Consumer Financial Protection Bureau, CARD Act Report: A Review 
of the Impact of the CARD Act on the Consumer Credit Card Market 
(Washington D.C.: Oct. 1, 2013). The reported numbers are based on an 
inquiry conducted by the CFPB Office of Supervision gathering 
information from a number of large banks on their credit card and CARD 
Act compliance practices. The issuers that participated in this 
inquiry represented approximately 80 percent of credit card industry 
balances. 

[31] The data in the analysis were from the New York Federal Reserve 
Bank Consumer Credit Panel/Equifax. The Consumer Credit Panel contains 
detailed records of individual debt and borrowing on a quarterly basis 
from the first quarter of 1999 to the most recent quarter. The study 
looked at data from 2005-2008 for individuals between 18 and 25 years 
old. Peter Debbaut, Andra Ghent, and Marianna Kudlyak, Are Young 
Borrowers Bad Borrowers? Evidence from the Credit CARD Act of 2009 
(Richmond, Va.: July 11, 2013). 

[32] See Student Monitor, 2013. 

[33] Jesse Bricker, Arthur B. Kennickell, Kevin B. Moore, and John 
Sabelhaus, "Changes in U.S. Family Finances from 2007 to 2010: 
Evidence from the Survey of Consumer Finances," Federal Reserve 
Bulletin, vol. 98, no. 2 (June 2012). Additionally, three issuers of 
college student credit cards told us that those cards' credit limits 
were typically lower than those of general credit cards. 

[34] Student Monitor asked respondents whether they typically carried 
a balance or paid the card in full each month for four different 
credit card types and combined the responses. Sallie Mae asked 
respondents to describe their typical credit card payment behavior. 

[35] Debbaut, et al. 

[36] The Credit Card Accountability Responsibility and Disclosure Act 
of 2009 required issuers to submit annually to the Federal Reserve the 
terms and conditions of any college credit card agreement in effect 
between the issuer and an institution of higher education at any time 
during the preceding calendar year, along with certain summary 
information about the agreements. Pub. L. No. 111-24, § 305(a),123 
Stat. 1734, 1750; 12 C.F.R. § 1026.57(d). This responsibility 
transferred from the Federal Reserve to CFPB in 2011. Dodd-Frank Wall 
Street Reform and Consumer Protection Act, Pub. L. No. 111-203, 124 
Stat. 1376 (2010). 

[37] For our review, we classified agreements that had been recorded 
as being with alumni associations or alumni under "alumni 
associations." We used "other" to include agreements with 
fraternities, sororities, professional or trade organizations, and 
those with multiple organizations, such as a university and an alumni 
association. 

[38] The database can be accessed at [hyperlink, 
http://data.consumerfinance.gov/Government/College-Credit-Card-
greements/r963-hvsf]. We downloaded the data on December 4, 2012. As 
of December 2, 2013, the 2011 data remained the most current available. 

[39] We combined two companies listed in the database--Capital One 
Bank (USA), N.A. and Capital One, N.A.--because they are both 
subsidiaries of Capital One Financial Corporation. 

[40] Results from nonprobability samples cannot be used to make 
inferences about a population, because in a nonprobability sample some 
elements of a population being studied have no chance or an unknown 
chance of being selected as part of the sample. We selected our sample 
from the 574 agreements that were still in effect as of January 1, 
2012, instead of the broader set of 798 filed agreements in 2011, 
because we were most interested in current agreements. 

[41] We excluded from our sample agreements with Elevations Credit 
Union, Pennsylvania State Employees Credit Union, and USC Credit Union 
because they did not contain credit card products, and we excluded 
agreements with Compass Bank because they were not with organizations 
associated with higher education, and therefore were outside the scope 
of our review. 

[42] Sallie Mae's annual study, which has produced information on 
college students' credit card use since 2010, uses telephone 
interviews of a sample of undergraduate students 18-24 years old and 
an unrelated sample of parents of such students. Eight hundred 
students were interviewed for the 2013 study. The Student Monitor 
study uses in-person, on-campus interviews of 1,200 college students 
enrolled full-time at 100 colleges and universities throughout the 
United States. The firm's Financial Services report has included 
information on student credit card use since 1996. 

[43] Pub. L. No. 111-24, §§ 301-305, 123 Stat. 1734,1747-51. 

[44] The Nilson Report is a twice-monthly trade journal that provides 
information on companies, products, and services from the payments 
industry. 

[End of section] 

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