Practices come under scrutiny
The Community College Association has joined the chorus of student, faculty and consumer groups to urge that action be taken in preventing campus debit card providers from adding hidden fees to the debit cards they offer students for financial aid.
CCA collecting data
And now, it would appear these practices are coming under even more scrutiny. In addition to the watchful eye of members of Congress, the Government Accountability Office and the Department of Education, Higher One, the top campus debit card providers, is under investigation by the Federal Reserve Bank of Chicago.
About two-thirds of California Community Colleges distribute financial aid using debit cards from a bank or other financial institution, according to the California Student Aid Commission, and many of them use Higher One. The CCA has begun collecting data on the companies that provide the cards and on the terms students must agree in order to receive them.
“At one of our colleges, students were told that if they chose the debit card over a check they would get their funds significantly earlier,” said CCA President Lynette Nyaggah, at the recent CCA Council meeting in April.
Meanwhile, students in CCA Board member Keith Law’s Critical Reasoning class at Merced College gathered research and surveyed over 160 students regarding the Higher One card last fall. They brought the survey results and their complaints to a Board of Trustees meeting in February. As a result, the board voted to conduct an in-depth survey of the 6,100 students receiving financial aid to determine whether further action should be taken.
“The charging of fees was the number one complaint by students,” said Law, who is also president of the Merced College Faculty Association.
Other complaints included the limited access to a campus ATM that doesn’t charge fees to withdraw money. Some students complained about the wait involved to receive funds if they don’t hold a Higher One account.
Although existing federal regulations prohibit charging fees to access financial aid, they do not cover the accounts where the aid is placed, like a debit account.
Support for NEA campaign
“Students are charged unusual fees that they are not aware of,” Law said. “There’s no reason they should be charged these additional fees when they face so many other financial difficulties with the skyrocketing costs of college.”
CCA is also actively supporting the National Education Association’s Degrees Not Debt campaign, which is committed to college affordability for all. Currently, Seven in 10 college graduates owe money, on average, a whopping $29,400, according to the NEA. This means too many Americans can’t access the higher education they need to get good jobs, own a home, and take part in the American Dream.
“We’re all taking out loans, and we’re all working, and it’s just choking us,” says California Teachers Association-Student President John Belleci.
• Need-based student aid must be increased
• Student loans must be made more affordable
• Public-service careers must be encouraged through expanded loan-forgiveness programs
• Institutional aid must be increased
A pledge form to that end can be found on the NEA website at www.nea.org/degreesnotdebt.