U.S. PIRG - The Campus Debit Card Trap Are Bank Partnerships Fair To Students?
The Campus Debit Card Trap - Are Bank Partnerships Fair To Students? by Rich Williams, Higher Education Advocate, U.S. PIRG Education Fund, with Edmund Mierzwinski, Consumer Program Director, U.S. PIRG Education Fund, May 2012"Banks and other financial firms are taking advantage of a variety of opportunities to form partnerships with colleges and universities to produce campus student ID cards and to offer student aid disbursements on debit or prepaid cards. In addition to on-campus services, such as student ID functions offered on the card, some cards offer traditional debit card services linked to bank accounts; other cards provide additional reloadable prepaid card functions. The disbursement of financial aid and university refunds is the most significant partnership identified. While schools are obtaining revenues and reducing costs by outsourcing certain services, the relationships between schools and financial institutions have raised questions because students end up bearing some costs directly – including per-swipe fees, inactivity fees, overdraft fees and more. Other issues include the effect of aggressive marketing strategies by partnering companies on student choice and weaker consumer protections on certain cards that hold student aid funds."
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