Miller: Students May Incur Unnecessary Fees to Access Financial Aid
WASHINGTON – U.S. Rep. George Miller, the senior Democrat on the House Education and the Workforce Committee, today asked Higher One Holdings, Inc. for further information on its debit card and ATM-placement practices nationwide after research indicated that students with Higher One debit cards may have difficulty accessing their financial aid free of fees due to limited ATM locations. Federal rules require that, in cases where a school opens a bank account for a student, the student must have convenient access to a fee-free ATM for that account.
“It has come to my attention that while hundreds of thousands of California students, including those at nearly half of California’s community colleges, access their aid through your debit cards, your company appears to maintain only 116 fee-free ATMs across the state,” Miller wrote. “This limited number of ATMs raises important questions about the adequacy of fee-free access to student aid, particularly for students attending large campuses, commuting students and online students.”
Providing inadequate fee-free ATMs to access student aid may put students at risk for higher student loan debt as they return to school this week. For example, in California, Higher One disburses financial aid for nearly 800,000 students, but appears to offer only one fee-free ATM per campus location on average. In addition, students in 21 locations appear to not have access to any fee-free ATM on campus.
A recent report by the U.S. Public Interest Research Group (US PIRG) highlighted how fees in many campus debit card programs target student’s financial aid. US PIRG found $0.50 fees to swipe a debit card with a PIN, $10 fees for six months of account inactivity, and up to $38 in fees for non-sufficient funds. These fees come directly out of students’ grants or loans meant for education.
“Such fees to access their Federal, State, and institutional aid deplete already-limited Pell Grant, Federal student loan and CalGrant dollars,” Miller wrote.
Today’s letter to Higher One builds upon Miller’s long-standing legislative and oversight efforts to protect our nation’s college students from excessive fees. Last June, Miller wrote letters to Education Secretary Arne Duncan, Consumer Financial Protection Bureau (CFPB) Director Richard Cordray and Department of Education Inspector General Kathleen Tighe requesting a careful and full examination of bank-affiliated student debit card practices at over 900 colleges and universities.
For the full text of the letter to the president of Higher One Holdings, Inc. and location of ATMs in California click here.
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