Business: Fewer Fees for College Debit Cards

While tuition and fees continue to skyrocket, the Education Department is attempting to help student finances in other ways. On October 27, the Department finished a new set of rules for common campus debit cards that students use to access financial aid funds. Before, the cards were subject to hefty overdraft fees and “swipe fees” – fees for simply using the card. The new rules prohibit these and other fees. Although a small feat, this is a step in the right direction according to Christine Lindstrom, the Director of Higher Education at the United States Public Interest Research Group, who was quoted saying, “Over all, this is a really decisive victory for students.” Around 40% of colleges utilize campus debit cards that hold over $25 billion in financial aid on them per year. The cards give students immediate access to federal grants and loans, but the money could be accessed just as quickly if deposited into a student’s own bank account – a point that is not always clear to students who agree to use the cards. Students are not required to use the debit cards. The rules will take effect in the fall 2016 semester.

Contributor: Claire Pacek

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