College and bank partnerships raise concerns
Study shows linked accounts may cause extra inactivity and overdraft fees
June 6, 2012, 9:56 pm · Updated June 13, 2012, 10:12 pm·
Penn is among the hundreds of colleges and universities nationwide identified as holding partnerships with banks — agreements that may jeopardize a student’s best financial interests.
In The Campus Debit Card Trap, a recent report released last month by the New Jersey Public Interest Research Group, it was found that relationships between banks and academic institutions might create additional fees for students — including per-swipe fees, inactivity fees and overdraft fees.
The most identified type of partnership is the disbursement of financial aid and university refunds via prepaid debit cards, which could result in students paying fees in order to access their aid.
Such is the case concerning Higher One, a company that handles financial aid disbursements for 520 college campuses, serving 4.3 million students. According to the report, the “annual median cost of maintaining each of the 2 million One Accounts is $49 per student.”
Approximately 60 students at Western Washington University rallied against fees associated with using Higher One’s debit cards last November — a protest that garnered national attention by the press. The protest was followed by an incident concerning a student who was arrested at Catawba Valley Community College last October for complaining about his school’s relationship with Higher One.
According to Chris Bradie, associate vice president of Business Services, Penn currently has contracts with PNC Bank and Student Federal Credit Union.
Contrary to the findings of the report, Bradie said that Penn’s affiliation with banks benefits students by offering useful services without subjecting them to pay extra fees. “Each one of these providers offers unique services tailored with students in mind,” he said.
PNC’s services include provisions for free ATM usage, protection for overdrafts, automatic account alerts and online money-management tools, Bradie added.
PNC Vice President of Communications, Frederic Solomon, also said the corporation “is in tune with the needs of students and that it does not require them to pay inactivity or per-swipe fees.” He added that PNC and Penn do not have an arrangement over the disbursement of financial aid and university refunds via prepaid debit cards.
Bradie said that SCFU also offers “very low-cost services that are substantially advantageous for students … they highlight that their fees on wire transfers and cashier’s checks are comparatively lower than in many banks around the area.”
Both PNC and SFCU allow students to use their PennCards as regular ATM or debit cards, according to Bradie.
Charlie Lynch, a rising College sophomore, said “the Direct Deposit system they have makes managing and accessing my money easy. There are also a lot of PNC ATMs in the area, so if I were to use another bank, I’d have to deal with all the ATM withdraw charges.” Lynch does not feel dissuaded from continuing to use PNC.
Rising Engineering sophomore Pablo Sanchez is going to continue to use SFCU because “linking student accounts with banks is acceptable as long as there are no hidden fees and traps.”
Lance Wildorf, a rising College senior who uses a variety of banks across campus, agreed. “Partnerships with banks are adequate as long as money from financial aid funds is not used to pay unnecessary bank fees.”
Rising College freshman Astrid Rondeau, who chose not to link her Penn student account, said the report alerted her to the possible dangers created by partnerships between colleges and banks. “I’d rather just stick to banks I already know and trust,” she added.