Statement of Rich Williams, U.S. PIRG Higher Education Advocate, on the Congressional passage of bipartisan legislation to prevent subsidized Stafford student loan interest rates from doubling.
Banks and other financial firms take advantage of partnerships with colleges and universities, creating financial traps for students.
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.
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PIRG In The News
Thought the student loan crisis was bad as it is? Now add hefty fees into that mix. Providers say students can avoid the fees that pile up when they elect to receive their financial aid on a debit card, but new research from a consumer advocacy group finds that these companies throw up roadblocks to keep the fee revenue rolling in, even as colleges make big bucks off their affiliations with these institutions.
As many as 900 colleges are pushing students into using payment cards that carry hefty costs, sometimes even to get to their financial aid money, according to a report to be released Wednesday by a public interest group.
Consumer advocates have long criticized the amount of fees associated with debit cards. Most recently, a report by the U.S. Public Interest Research Group Education Fund found that hundreds of colleges have partnerships with financial companies to put a student’s financial aid on debit or prepaid cards that carry hefty fees. Under some of these deals, official student photo ID cards can double as debit cards.
UCLA’s chapter of the California Public Interest Research Group has been campaigning in favor of the measure. In March, the Undergraduate Students Association Council voted unanimously to support CALPIRG’s campaign to ban plastic bags.
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