April 24, 2014

Dems raise concerns over college-bank partnerships

April 25, 2014 – Several House and Senate Democrats reportedly urged Education Secretary Arne Duncan to curb the practice of colleges partnering with banks to offer students deals, such as debit cards, over concern that students' federal financial aid is going toward paying higher fees, not schooling.

The Hill reported that the lawmakers, in a letter to Duncan, referred to a February study by the Government Accountability Office that found "roughly 40 percent of all college students are enrolled at schools that have deals with banks to market debit cards to them."

Democratic Sens. Elizabeth Warren of Massachusetts, Tom Harkin of Iowa and Rep. George Miller of California signed the letter.

Last year, CFPB launched an inquiry about card-based financial products offered to college students on campus, including products offered by federally regulated financial institutions such as credit unions. NAFCU submitted a comment letter to the bureau explaining credit unions' offerings of member-tailored products, financial resources and responsible financial education for college-aged members.