Over the past few weeks, a group of protesters have stationed themselves in front of the U.S. Bank in the Memorial Union, protesting its placement on a public university. While the protesters’ concerns are valid, banks, and any private entity for that matter, can have a functional place on a public college campus.
A bank’s primary function is to provide a safe place to keep and save money, and in turn, use that money to provide credit and investments to other people. The primary target of the campus branch is college students, so naturally it will offer student loans and low-limit credit cards to help students pay for tuition and other purchases.
This in itself is not wrong. It’s safe to say that nearly every student at UC Davis keeps their money in a bank of some kind, and not under their mattress or behind the toilet. Therefore, whether a bank branch is on campus or 20 feet away, students will use it. There is a clear market for banks among college students, particularly ones that are conveniently located on campus.
A lot of the contention over U.S. Bank and banks in public universities is that they are capitalizing on a desperate student population in need of loans to pay for rising tuition costs. Therefore, these on-campus banks can charge higher-than-market interest rates and the students will have no choice but to use that bank. This may be the case for a college town with only one bank in the city, but this isn’t the situation for Davis.
A couple blocks off campus lay numerous other banks that can offer student loans and credit, some at lower interest rates than U.S. Bank. Therefore, students, acting as rational individuals, will find the best loan interest rate according to their needs. The U.S. Bank in the MU does not have a monopoly on the market for credit and loans, despite its location.
Another concern, especially this U.S. Bank branch, is that the university is profiting off every new account that is opened at that branch. Therefore, UC Davis would want as many students to use this U.S. Bank, even if the terms of the loan aren’t optimal.
This is an unfortunate conflict of interest. On the one hand, with rising tuition costs, the administration should want students to find the cheapest way to pay for the fees. At the same time, the university wants to maximize the income it can receive from U.S. Bank to, in turn, reduce costs displaced onto students.
The best way for the university to neutralize this issue is to provide students with transparent information about student loans and help students find optimal loans. With Financial Aid Awareness Week currently going on, UC Davis is providing students with information about loans in an effort to help them find the optimal ones.
Nonetheless, banks can function at a public university. Students need the services provided by these financial institutions and, if the terms of the contract are right, universities can earn additional income at almost no expense to help offset rising tuition fees.
All things considered, these issues don’t devalue the sanctity of public education. The university is attempting to find new sources of income that don’t come from the state, which seems to be the future of public education funding.
What do you think about banks on a public university? Send in your opinion to firstname.lastname@example.org.
Signed by: Jason Alpert, Trevor Cramer, Amy Stewart, Hannah Strumwasser, Uyen Cao
Editor’s note: The California Aggie Editorial Board was split. For another perspective, see Banks on campus: Not in our interest.
What about you? If you have an opinion on U.S. Bank, or any other campus issues, let us know. Send your letter to email@example.com by Wednesday at noon to be published in Thursday’s Aggie.