Colleges Pushing Students to Use Heavy Interest Payment Cards
It does not take too long for many young people to realize that they are paying significantly high student fees at banks. Reports show that as many as nine hundred colleges are encouraging students to use payment cards that are subjected to high fees.
This is reportedly due to the types of companies hired by colleges to pay out students’ financial aid on debit cards. The cards are used as all-purpose debit cards; designed for a specific ATM owned by a particular company. The colleges promoted it as a faster, cheaper way for the colleges to get students their money. However, the reality is that while it may be cheaper for the college, it does not offer cheaper student’s fees at banks.
According to a report compiled by a public interest group, colleges and their selected financial partners, reap huge financial benefits from student’s fees at banks. The report claims that frequently secretive negotiations occur, apparently in violation of Federal law. Reported indications are that at least two out of five higher education students in America, estimated at nine million people, have arrangements with financial companies.
Substantial existing debt is added to by student fees at banks with records showing that this type of debt is in the region of $1 million. It has overtaken credit cards as the primary source of unsecured debt in the U.S.A.
Included in student fees at banks, are charges made for a “lack of documentation fee”, which is related to students failing to submit various paperwork. It is stated by the U.S. Department of Education, that charging such fees is “unallowable”.
Other student fees at banks reportedly include $50 for an overdrawn account exceeding forty five days and $10 monthly for non-usage of an account for six months. It does not stop there; $29 to $38, if an account is overdrawn with a recurring bill payment. A charge of 50 cents is made for using a PIN and not a signature in a retail outlet.
According to public files and the United States PIRG report, the combination of Wells Fargo and the U.S. Bank, have arrangements with schools, responsible 3.7 enrollments. “Higher One” has reportedly agreements with 520 campuses, which enroll over 4.3 millions students.
From these volumes, it is shown that student fee’s at banks generate a highly significant income for some financial institutions, to the possible detriment of students and their families.