Colorado colleges, universities and their alumni associations pocket millions of dollars a year via lucrative deals with banks and credit-card companies that peddle services to students, faculty and alumni.

By selling coveted mailing lists that can number into the hundreds of thousands of names — and even include athletic boosters and school donors — the schools have set up a never-ending stream of revenue that takes little more than a signature to feed.

Some schools even get a percentage of every credit-card purchase or debit-card transaction a student or alumnus makes, according to copies of the deals reviewed by The Denver Post.

Colleges say they’re merely helping students learn financial responsibility; banks say they’re simply offering a needed service and funding; critics contend it’s just another way to make money on the backs of individuals already burdened by an economic slump.

“Young people are the future. If a bank can get them at the beginning, it’s long-term marketing,” said Gale Hillebrand, chief counsel at Consumers Union, which publishes Consumer Reports. “The debt treadmill is designed to generate revenue for years.”

The contracts reviewed by The Post contain various provisions that translate into money for the schools. Among them:

• Royalty payments as high as $550,000 — and bonuses of up to $50,000 a year — based on the number of credit cards or bank accounts opened by students or alumni.

• Monthly payments up to $300 for ATM machines placed in strategic campus locales.

• ATM and debit cards tied to student IDs with payments for each new account — and bonuses when they’re used.

• Marketing access to all home athletic events such as football and basketball games.

Bankers say they’re filling two needs: those of students just getting started and those of schools in need of revenue.

“Providing young individuals with an introduction to basic banking services, like checking accounts and savings accounts, helps further financial literacy and bestow individuals with the basic tools to develop responsible financial habits,” Colorado Bankers Association spokesman Tim Powers said. “Universities are able to receive a source of income during a time when they are particularly stressed — income that does not have to come from tuition or the state.”

In some cases, the contracts are worth millions of dollars to the school groups, which typically provide extensive lists of student and alumni names, addresses, e-mails and telephone numbers. It’s a virtual marketing gold mine for the banks.

The mailing list for one alumni group — University of Colorado Boulder Foundation — tops 220,000 names, according to its contract with FIA Card Services, which is owned by Bank of America.

Path of least resistance

Though not all schools release student mailing lists, they do allow for on-campus marketing of financial products.

Students say they tend toward these pitches because it’s simply easier than shopping around.

With the advent of an academic year reflecting the impact of new federal rules that restrict how undergrads are offered credit cards, financial institutions are culling more creative ways to convert college students into long-term customers.

Gone are the days when the newest batch of college freshmen is wooed into applying for a credit card with giveaways of towels and T-shirts, coffee mugs and pens, all sporting a school’s logo.

The federal Credit CARD Act now prevents such on-campus pushes, and similar off-campus ones are prohibited within 1,000 feet of campus.

So instead of a logoed T-shirt for a credit-card application, college students — mostly freshmen — are likely to get that same shirt for opening a new checking account tied to an ATM or debit card.

And in many cases, that card is the student’s campus ID.

“This is the first vintage of college students covered by the new law,” said John Ulzheimer, president of consumer education for Credit.com, a credit information website. “College students are the next generation of card users, and giving up on that group will take more than federal legislation.”

The law has a number of components meant to beat back predatory practices that banks and card issuers relied on for years. One that came under scrutiny was the combined use of affinity agreements — paid permission to use a school’s logo on promotional items — with credit-card marketing.

Induced into applying for a card — sometimes with offers of free pizza — students were too easily snatched into endless debt, critics argued.

The new rules require an adult co-signer or proof of income to pay off the card for any student under 21.

“Applying for a credit card is serious stuff, and it shouldn’t be just to get a T-shirt,” said Hillebrand, a lead negotiator in writing the rules.

Boosting transparency

The rules also did another thing: All colleges and universities — public and private — must disclose on request their once-secret agreements with credit-card companies.

Schools were getting enriched at times when student borrowing hit record levels.

A 2009 study by Consolidated Credit Counseling Services Inc. determined 20 percent of college freshmen had obtained a credit card in high school and another 40 percent signed up in their first year of college.

Things began to change in 1999 and 2000. More than 400 colleges and universities formed policies against on-campus credit-card marketing, according to Robert Manning of the Rochester Institute of Technology, author of “Credit Card Nation.”

But not everything changed. In 2005, Nellie Mae, which offers federal and private education loans, found 76 percent of all undergrads had at least one credit card — and 56 percent got their first card as freshmen.

The average balance: $2,169.

Nearly all said their primary source for selecting a card was a direct-mail solicitation.

The University of Colorado has long restricted access to its student mailing lists, in part to prevent banks from marketing credit cards, according to Ken McConnellogue, associate vice president for university relations.

What the school has, however, is a deal with Elevations Credit Union — formerly the University of Colorado Federal Credit Union — in which students are pitched a bank account that ties into their ID card. The minimum royalty for access to student, faculty and staff lists: $13,000 yearly.

That includes a monthly rental fee for six ATM machines of up to $300 each as well as a 5 cent bonus for every withdrawal made at the machine located at the University Memorial Center, the school’s “cultural, social and entertainment center.”

“For us it’s not some bank out of Wilmington, Del., that’s saying, ‘Hey, get a credit card,’ ” McConnellogue said. “They are very lucrative contracts, and virtually every university in the country does this. People may want a card with the school logo on it and to support that school.”

That’s the case with the university’s alumni foundation. That contract, which ends in 2013, calls for $4.1 million paid over its seven-year term — $550,000 of it this year — to market credit cards.

Some schools never jumped into the make-money fray — until now. And they were surprised to learn how lucrative it could be.

They pay us?

Metropolitan State College of Denver recently inked a deal with U.S. Bank to offer ATM and debit-card services tied to student ID cards. Student representatives were included in the decision.

School officials said they were shocked to learn banks were willing to pay for the privilege of marketing to students.

“We didn’t know it wasn’t going to cost us anything,” said George Middlemist, Metro State’s associate vice president of administration and finance. “There are not too many things we do that don’t come with a bill.”

In this case, U.S. Bank paid Metro a $75,000 signing bonus and promises yearly royalties of at least $32,000.

Other schools have similar deals.

While a student at Front Range Community College, Kathleen Barrett said, the tie-in to her campus ID made it an easier — though not wise — choice to bank with the institution pushed by the college.

“It was simpler, but the fees weren’t,” said Barrett, now a senior at CSU majoring in political science. “So after three months, I decided to cancel the account.”

That the school made money on her didn’t sit well, either.

“I also figured in some way the school was making money off of the students,” she said. “That was another reason to close the account.”

David Migoya: 303-954-1506 or dmigoya@denverpost.com