Card Fees Bite Students

November 17, 2011
Boston Globe 
credit card news

After taking a drubbing for trying to stick customers with exorbitant fees, Bank of America has slinked out of the spotlight, for now. But numerous other financial firms are getting away with the same. Higher One, for instance, nets most of its annual revenue -- a projected $180 million this year -- from fees, collected primarily from struggling college students. Higher One gives students immediate access to the loan and grant money remaining after they have paid tuition. It deposits what is left of students' aid money on debit cards. Students can opt for a check or direct deposit instead, but the debit card is so convenient that at least half of students keep it. Colleges save time and money, and students avoid long lines at bursars' offices waiting to receive a paper check. Not everyone wins, however. Higher One charges fees that would put any major bank to shame, among them an overdraft charge of $29; a $2.50 charge for using non-Higher One ATMs; and a 50-cent fee whenever students key in a PIN on a debit card purchase instead of signing for it. Higher One's fees are way up there compared with most community banks and credit unions, according to Mark Kantrowitz, publisher of Finaid.org, a college finance Web site. And the fees are levied on public money intended for education and loans on which students already pay interest.
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