Thursday, February 20, 2014
The politically nonpartisan Government Accountability Office released its report on the higher education prepaid debit card market. The GAO said that, as of July 2013, at least 852 schools, or 11 percent of U.S. colleges and universities, offered campus cards to its students. With a growing number of schools partnering with card providers for such programs, the GAO believes that Congress should require campus card providers to publicly disclose their agreements with schools for public review.
The GAO reported that the schools which offered the programs were "disproportionately large," with enrollments constituting about 40 percent of all higher education students. "However, the percentage of students enrolled in their schools' college card programs was unknown," the agency said.
The GAO found that campus card fees were comparable to mainstream general purpose reloadable prepaid cards offered by banks and credit unions. However, the agency could not obtain hard data on the totality of fees that students pay to use the cards. "The total fees students pay are not known, and some providers declined or said they were unable to provide these data to GAO," the agency added.
The GAO also concluded that a lack of clear definition about what the Department of Education means by "convenient access" when it comes to ATMs for students may result in students incurring unnecessary fees when making cash withdrawals of federal aid loaded on the cards.
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