A May 2012 survey by Public Interest Research Group (PIRG) Education Fund shows that an increasing number of colleges are working with major financial institutions on school-branded debit cards. Such cards are offered at 32 of the 50 biggest public 4-year schools, the report says. Typically, the cards are accepted on and off campus; in some cases, schools even disburse student financial aid to the debit-card account.
But, PIRG notes, students who use a school-branded card that’s provided by an outside bank should know that they might face steep and frequent fees on that card’s account, such as per-swipe, ATM, balance-inquiry, inactivity and even account-closing fees. For instance, PIRG says, students might pay 50 cents per swipe to access the school-backed account that holds their financial aid, rather than being able to access those funds from their own bank account.
PIRG recommends that students turn down the school’s preferred bank if they don’t like the terms. If you receive financial aid, you should insist that the school either directly deposit those funds into your own bank account or issue a paper check that you deposit yourself.