<p>"It took Mario Parker-Milligan less than a semester to decide that he was paying too many fees to Higher One, the company hired by his college to pay out students' financial aid on debit cards.</p>
<p>Four years after he opted out, his classmates still face more than a dozen fees for replacement cards, for using the cards as all-purpose debit cards, for using an ATM other than the two on-campus kiosks owned by Higher One.</p>
<p>'They sold it as a faster, cheaper way for the college to get students their money,' said Parker-Milligan, 23, student body president at Lane Community College in Eugene, Ore. 'It may be cheaper for the college, but it's not cheaper for the students.'</p>
<p>As many as 900 colleges are pushing students into using payment cards that carry hefty costs, sometimes even to get to their financial aid money, according to a report to be released Wednesday by a public interest group.</p>
<p>Colleges and banks rake in millions from the fees, often through secretive deals and sometimes in apparent violation of federal law, according to the report, an early copy of which was obtained by The Associated Press." ...</p>
<p>Why does this make me think of Gordon Gekko's famous line?</p>
<p>Banks have been pushing these wherever they can: rebate debit cards from electronics sellers (I think that most consumers don’t like them), the IRS using them for refunds (in many cases, fraudulant), and anywhere cash is distributed where the bank can get a fee.</p>
<p>Parents and students have to figure out the best solution in terms of fees, charges, fines vs convenience. It’s a pain that your school is helping the bankers pick your pocket but everyone is doing that today. Except maybe your local credit union.</p>
<p>We’re considering suggesting to our D that she open a USBank account, which on the face of it looks appealing:</p>
<p>
</p>
<p>That footnote 2 is “Non-routine transaction and paper statement fees may apply” and 3 is a disclaimer about fees from other banks whose ATMs you use.</p>
<p>There are two USBank ATMs on campus, and two branches in the small town where her school is located. She can link her account to her student ID card. It all sounds good - since the alternative is using a bank with less-convenient ATMs or one where she will have to pay a fee with every ATM swipe.</p>
<p>But I can’t find the fine print anywhere online, which troubles me.</p>
<p>I notice that the article linked about mentions USBank, but without specifics. Anyone have experience with USBank student accounts?</p>
<p>You might look to see if there is a credit union in town - they are often in networks of credit unions where you can use ATMs at participating credit unions with no fees. Our son has an account at our local credit union which doesn’t have many branches but his employer has a credit union (in his network) on-site (ATM + branch) where he can do transactions without fees.</p>
<p>You may be forced to go with the on-campus solution then.</p>
<p>I remember when Boston College got their first ATM machine in McElroy. They had bank staff outside signing students up for accounts. It was BayBank and I already had an account with them so it was convenient for me. The good old days before fees when the justification for ATMs was that it would save the banks and customers money because tellers weren’t needed. Now they are profit centers.</p>
<p>I never took the time to read about those cards “from” the college, but I never trusted them. It seems that any card I didn’t ask for that comes in the mail is an attempt to separate me from my money; I just kind of assumed this one was the same.</p>
<p>WRT choosing a bank, it looks like USAA Federal Savings Bank may be a good choice for those that are eligible. We’re considering having our daughter do most of her banking with USAA, at least at the start. Students can deposit checks electronically (when they get them, which I suspect is infrequent); USAA doesn’t charge for foreign ATMs and often refunds other banks’ ATM fees, too.</p>
<p>If it becomes expedient to move to the bank on campus (which happens to be Capital One), she can do that, but I’d like her to give USAA a try.</p>
<p>I… haven’t encountered anything like this? My school just gives me checks. I’m a bit confused on how exactly colleges profit from this system. Why is writing checks or depositing money directly more costly for them than roping students into this extortion scheme?</p>
<p>Instead of giving you a check, they give you a debit card which you can use to get cash from a machine (probably with a fee) or to pay for things at merchants that accept debit cards (like a grocery store).</p>
<p>Check the credit unions that you are in the field of membership for. If they participate in the [url=<a href=“http://www.cuservicecenter.com/]CUServiceCenter.com[/url”>http://www.cuservicecenter.com/]CUServiceCenter.com[/url</a>] network (there may be other similar CU networks that I don’t know about, so ask around) it is easy to find a “joint branch” where the host CU allows banking privileges to members of other participating CUs. If there is no “joint branch”, there almost certainly are free cash machines available. For one of our CUs, the machines at most 7-elevens are free.</p>
<p>We can all cut and paste great deals offered by our favorite banks and credit unions
(like this)
</p>
<p>But if the University gives the student a debit card and puts the financial aid in an account and insists that the student use the debit card to access the funds, I am not sure what you can do about it.</p>
<p>What you CAN do, if it is federal aid is call your congressperson and senator, also send and email. Copy the finaid office.</p>
<p>If it is state aid, you can call your state rep, which is usually very effective, as they are remarkably responsive to their constituency and will take it up almost immediately, IME.</p>
<p>You can make sure the parents’ association knows about this. I believe, at this point, under the law they MAY have to offer an alternative with no fees. I could be wrong, but I would look into that if I were someone in this position, personally.</p>
<p>You can opt out of the debit card option from Higher One. There is a direct deposit option with a form to fill that you can use to direct the money to a bank account of your choice when the fund is available. There have been complaints that Higher One does not make this information readily available nor makes it easy for students to sign up. They and many times the schools usually will automatically enroll you into the debit card plan.</p>
<p>Sikorsky - we went with USAA for my daughter and I couldn’t be more satisfied. It’s a piece of cake. For all intents and purposes there are no fees - she gets free atm use at dozens of places all over such as CVS pharmacy, but they also waive the fees at atm’s which charge for quite a few uses per month - can’t remember how many but she’s never even needed to use any of them as she can find free atm all over.</p>
<p>She has a smartphone and with it she can deposit checks! Paychecks, personal checks, whatever! </p>
<p>We went ahead and got a credit card (jointly with me) in case of overdraft and also just for emergencies. She hasn’t ever activated any overdraft so far but if she did it would just be a one hundred dollar transfer to her atm account, and would not incur a fee for that either.</p>
<p>Our local credit union did not have any networking with the credit unions in her school’s community, so I’m really grateful we were eligible for USAA. If you can get it, their banking is a fantastic deal for students.</p>
<p>If not eligible for USAA, that Ally Bank looks like a good deal. I was hesitant about online banking but it has been absolutely no problems at all. She can deposit her checks and get money out or pay for things just fine. I can transfer money to her ATM account directly from my credit union online. About the only thing we haven’t figured out a really seamless way to handle is depositing large amounts of cash. Unfortunately that hasn’t been much of an issue, though. lol.</p>