Guilford College will join the list of U.S. educational institutions using smart cards on their campuses.

In August the Greensboro, N.C., school will begin issuing cards containing both microcomputer chips and magnetic stripes to 2,000 students, faculty, and staff.

Guilford College's program is one of a series of trials sponsored by technology and financial companies in closed environments like campuses. The companies are testing technical feasibility and hoping to leave a lasting impression on young adults who could influence broader adoption of chip cards.

"We feel higher education is a training ground for future consumers," said Christopher T. Corum, director of systems marketing at Cybermark in Tallahassee, Fla., the smart card vendor for the Guilford project.

Acclimating college students to smart cards "makes it an easier sell down the road," Mr. Corum said. "Closed systems are driving the market now."

First Union Corp. of Charlotte, N.C., is the college's bank partner, and will provide the Guilford population with free and low-cost banking services.

Michael Love, First Union's vice president of smart card technology, said the bank joined the program to generate interest in smart cards and "introduce students to responsible financial management."

Mr. Love said, "It takes a lot of consumer education to understand the utility of a smart card."

Guilford, a Quaker liberal arts college founded in 1837, is making a $9 million investment in information technology and facility enhancement this summer. That project includes wiring all academic buildings and residence halls to a campus network that will support the smart card system.

The Guilford card will serve as a student identification card and as an automated teller machine card for students who want to open accounts with First Union. Students will be able to use it at vending and laundry machines and to check out books from the library.

Cardholders will be able to load up to $100 on the chip from any of four cash-to-card machines on campus, supplied by Debitek Inc. of Chattanooga, Tenn.

Mark Owczarski, a college spokesman, said the smart card program will "improve services to all members of the Guilford community" while "saving the college money."

Mr. Corum said the program is modeled after the one at Florida State University, a pioneering installation with 35,000 chip cards. Cybermark, a joint venture of Battelle Memorial Institute, Huntington Bancshares, and the Student Loan Marketing Association, recently acquired the Florida State technology.

Any college campus that does not gear up for smart cards "is making a major mistake," said Lyn White, executive director of the National Association of Campus Card Users. "Banks need to concentrate on the college market," she said, because "by 2005 most banking will be done by chip card."

Ms. White said small-college smart card systems can cost between $250,000 and $500,000, depending on their complexity. The cost of chip cards can be one of the major expenses, she said, because it cannot be passed along to students.

Cybermark's cards cost $1 to $20 each, Mr. Corum said, and Guilford's are about $4. Magnetic stripe cards cost less than $1.

"It depends on how a university approaches this," Ms. White said. "A lot of universities think they can make money" using a smart card system, "but they have barely broken even."

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