Students Should Withdraw from Some Credit Card Programs
4/16/2014, 3 p.m.
Now with so many colleges and universities entering into contracts with debit card providers the opportunity for these lucrative fees to strip away needed student aid is at hand. The DOE faces a major decision. Should the Department restrict schools from entering into partnerships with financial institutions that allow students to overdraw their accounts with the swipe of a debit card? If so, that decision would be consistent with the Department’s existing policy to disallow disbursements of student aid onto debit cards or accounts that can be used or converted into a credit instrument.
Allowing consumers to spend more than they have in exchange for a fee is the equivalent of offering them a loan to be repaid with interest.
Until DOE finalizes its rulemaking, students and their parents should set out on a mission to better understand the terms of the college debit cards issued. If review of the ‘fine print’ details lead to more questions, those concerns should be brought to the attention of the debit card providers, college officials and if necessary, to the Consumer Financial Protection Bureau through its online complaint forms. Those forms can be found at www.consumerfinance.gov.
Just as the United Negro College Fund slogan advises that ‘a mind is a terrible thing to waste’, so too is financial aid. Funds disbursed to support higher education should not be snatched away for private gain.
Charlene Crowell is a communications manager with the Center for Responsible Lending. She can be reached at Charlene.firstname.lastname@example.org.