Report: College-bank debit card deals not always in student best interests
Wake up and good morning. As if too many college students are not already over their heads with college debt and financial stresses they may not really understand.... now comes a new report from the U.S. Public Interest Group (PIRG) Education Fund that finds many major colleges and universities are trying to trim costs by cutting deals with banks issuing debit cards acting as student IDs and taking over the duties of dispensing financial aid.
The problem, says the report The Campus Debit Card Trap, is that incoming students assume these cards (emblazoned with the university name and logo) are endorsed by their schools and discourage the student from shopping for better deals. But at the same time these financial deals can carry hefty fees for students. Says the report: "Students end up bearing some costs directly including per-swipe fees, inactivity fees, overdraft fess and more." Here's a May 30 story on the report and the issues from the New York Times.
The report also looked at specific deals, noting relationships between St. Petersburg College and a financial firm called Higher One using the SPC OneCard (above) (and to SPC's credit, this explainer to parents); the University of Central Florida and SunTrust, and the University of Florida and Wells Fargo. The University of South Florida in Tampa had no such deal, according to the report.
Higher One, criticized for aggressive fees, punched back against the PIRG report. In a New Haven (Conn.) Independent story, which calls Higher One "New Haven's hottest young company," Higher One executives say the PIRG report misstates their company's benefits to students.
At the very least, the PIRG report is a cautionary tale for students -- already overwhelmed with the newness, stress of starting college and borrowing money for school -- to shop around before committing to any financial relationship. As they say: Do your homework.
-- Robert Trigaux, Business Columnist, Tampa Bay Times