The question of whether colleges should permit credit card vendors to market themselves to students on campuses continues to be a controversial subject. High levels of student credit card debt (average outstanding balance for all students in 2005 was $2,169 according to Nellie Mae) created a lot of criticism of schools for allowing the vendors to recruit new cardholders.

In recent years some states passed new legislation trying to to reduce campus marketing. But many schools just can’t pass up the money that the credit card vendors offer them for their consent. The vendors argue that students are adults who should be able to make their own decisions regarding credit cards.

Even if the colleges kicked all the vendors off campus the fact remains that most students don’t even get their cards from on-campus promotions. Nellie Mae says that only 18% of students got their first credit card from a campus booth. Many students get their first card while in high school while others get them though direct mail or Internet offers. So I’m not convinced that student credit card debt levels will decrease substantially even if the schools ban the vendors (which will probably never happen anyway). However, the majority of students (63%) seem to approve of such a ban, according to a 2004 youngmoney.com reader survey.

The solution? It comes back to education. Some groups (including some credit card companies) are already doing a better job of teaching personal finance education to young adults. Unfortunately, they’re not doing nearly enough. Everyone needs to do more to help students learn basic financial skills and avoid debt — that includes parents, schools, financial institutions and the media. That’s the only way we’re going to make a major change.

There was a good story on this topic in February’s Orlando Sentinel (the web link is broken). What do you think?