The Campus Debit Card Trap - U.S. PIRG

The Campus Debit Card Trap

Are Bank Partnerships Fair To Students?

The Campus Debit Card Trap

Are Bank Partnerships Fair To Students?

May 2012

By Rich Williams, Higher Education Advocate, U.S. PIRG Education Fund, with Edmund Mierzwinski, Consumer Program Director, U.S. PIRG Education Fund.

Acknowledgements

Special thanks to Christine Lindstrom, Higher Education Project Director and the sta and students of U.S. PIRG Education Fund and the Student PIRGs; Nicole Allen, Student PIRGs; Raha Vaziri-Tabar, U.S. PIRG Education Fund research assistant; Barmak Nassirian; Lauren Saunders, National Consumer Law Center; Abigail Caplovitz Field, Esq.

? 2012 U.S. PIRG Education Fund. Some Rights Reserved.

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U.S. PIRG Education Fund gratefully acknowledges the support of the Ford Foundation (). However, the ndings and views expressed in this report and on the website are solely those of the authors and U.S. PIRG Education Fund.

U.S. PIRG: U.S. PIRG, the federation of state Public Interest Research Groups (PIRGs), takes on powerful interests on behalf of the American public, working to win concrete results for our health and our well-being. e state PIRGs are a nationwide network of nonpro t, nonpartisan, state-based public interest advocacy organizations.

e state PIRGs' mission is to deliver persistent, result-oriented activism that protects the environment, encourages a fair marketplace for consumers, and fosters responsive, democratic government. U.S. PIRG Education Fund serves as U.S. PIRG's research and education a liate.

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Contents

Summary and Key Findings ........................................................................ 1 The Increasing Role of Financial Players on Campus: Credit Cards, Student Loans, And Now, Debit Cards ................................... 4 Overview of Campus Cards, Functions, and the Players............................. 8 The Banks and Financial Firms Behind Campus Cards. ...........................10 Student Fee Income is the Backbone of the Business Model ....................12 Campus Cards and Financial Aid Disbursement .......................................14 A Closer Look at the Biggest Player: Higher One .....................................18 Issues Surrounding the Marketing of Campus Cards................................20 Recommendations ....................................................................................24 Appendix 1: Common Fees On Campus Cards ...........................................32 Appendix 2: Consumer Protections Vary Among Credit, Debit and Prepaid Cards ....................................................35 Endnotes ...................................................................................................37

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