The financial institutions have for long been on the lookout for educational institutions like college campuses to be a ground of establishment. However, over the recent years, this has become quite a matter of issue for the banks as they have experienced much trouble with the regulation bodies. These officials have banned the banks from bestowing gifts upon the students that sign up for the credit cards. Even the colleges have now been discouraged to extend any form of student loans to those who cannot afford to pay for the education.
This however, has not stopped the colleges and financial institutions in making deals among themselves and devising new packages for the students. Some colleges are now considering the prospects of making student ID cards and debit cards that they would be able to use in need of any financial assistance. The advocates of the consumers are becoming concerned about the possibility of the students being turned into profit gaining machines by these financial institutions where they may seek advantage by charging fees and acquiring access methods to the financial funds. This has led to the customer advocate groups taking charge of the documentation and necessary measures to ensure there is no such activity going on.
A report was released this Wednesday stating the statistics of the educational institutions that have made up deals with banks and get paid a certain amount of commission for the outsourcing of these financial services. The banks extend exclusive offers to the students and charge high sums of money in return. This saves costs for the educational institutions themselves as they do not have to invest in these services.
Numerous well known schools and colleges are now making use of these deals and according to the survey conducted, almost two of every five educational institutions are availing these financial services. Among these institutes, some popular names are: University of Michigan, University of Pennsylvania, University of Florida and other private and public institutes. The ID cards offered to the students belonging to these universities are stamped with the logo of the financial institutions in charge of the provision of these services. The students also have the option of opening an account in that bank for the deposit and withdrawal of funds as and when they want.
According to Rich Williams, a US advocate for Public Interest Research Group Education Fund, “Campus debit cards are wolves in sheep’s clothing. Students think they can access their dollars freely, but instead their aid is being eaten up in fees.” The in charge for student loans, Rohit Chopra emphasized the need for the students to be fully aware of the possible options they have for these financial institutions on campus and what the deal actually was. He says, “Students should know their low-cost options to access their student loans and scholarships because we hear that many students don’t always know that there are alternatives. And we want that to be clear for them.”
The financial aid that was extended to the students was previously monitored by the college officials but has now been passed on to the banks themselves that take full advantage of making money and acquire financial gains out of the students where they are charged more than they ought to.