Tuesday, July 10, 2012
Campus cards come under scrutiny
In June 2012, two Democratic legislators urged three federal agency leaders to look into the business practices of prepaid campus card programs. Sen. Dick Durbin, D-Ill., and Rep. George Miller, D- Calif., penned letters to the heads of the U.S. Department of Education and the Consumer Financial Protection Bureau, expressing concern that students are being "nickel-and-dimed" via fees on prepaid campus cards.
In the letters sent to U.S. Secretary of Education Arne Duncan, Department of Education Inspector General Kathleen Tighe and CFPB Director Richard Cordray, the lawmakers said campus cards can come with weak consumer protections and "high" or "hidden" fees, including PIN debit, balance inquiry, dormancy, account closure and reload fees.
Durbin and Miller cited U.S. Public Interest Group Education Fund research that said as many as 900 colleges are "pushing students into using campus debit cards that carry numerous unnecessary, costly and unknown bank fees." The lawmakers said, "At a time when total U.S. student loan debt is reaching the $1 trillion mark, we should not allow costly and inappropriate debit card fees to add to that debt."
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