When colleges and banks team up to market bank accounts to students, protecting students' loan funds may take last place in the deal. Instead of helping students find the best account for them, these deals may push students into accounts with high overdraft fees and other harmful features.
CRL research shows that overdraft fees alone on these accounts may reach over $700 year – more than the price of textbooks.
The Department of Education has the opportunity to protect student loan dollars from overdraft fees in an upcoming cash management rulemaking.
But there is no need to wait for a rule. Colleges should do more right now to ensure that they are not helping banks pressure or trick students into accounts with harmful fees. CRL and a coalition of student, consumer, education groups have asked the CFPB to help guide colleges by providing them with a "Safe Student Account Scorecard" to use in negotiations with banks.
To learn more about this issue, read:
- CRL Comments to the Department of Education, July 2015
- "It's Time to End Predatory College-Bank Partnerships," The Chronicle of Higher Education by Maura Dundon
- CRL's report Overdraft U about overdraft fees on campus accounts (Executive Summary PDF)
- "CFPB Student Scorecard Offers Much-Needed Reforms," American Banker by Leslie Parrish
- CRL's April 20 letter to the CFPB supporting the Safe Student Account Scorecard
- Reports by the GAO, Department of Education Inspector General, CFPB, Consumers Union, and U.S. PIRG.