Find out if your college-sponsored bank account is affordable
Compare fees and charges against other banking offers.
Many American colleges offer sponsored bank accounts for students, but being able to compare campus-approved accounts against regular banks and other educational institutions has been difficult, until now.
New cash management regulations, established by the Department of Education, require institutions to publicly disclose any contract with a financial account provider that offers credit balances to students.
These accounts are often labelled as “official” college checking or prepaid accounts and are sometimes promoted using college logos, mascots or names. However, the Consumer Financial Protection Bureau (CFPB) warns that “just because a bank, credit union or other account provider pays your college for the right to market an account… doesn’t always mean that it’s the best deal for you”.
From September, colleges must disclose online; the number of students that use their sponsored accounts; how much these students pay in account fees; and how much the provider pays to promote these accounts.
The Education Department maintains an up-to-date centralized database of this information and submissions.
This practice will allow students to compare their college’s arrangement against other schools’ programs, as well as everyday checking and prepaid accounts offered by banks and other financial institutions.
Late last year, a report released by the CFPB raised concerns about costly fees and risky features that can be attached to some college-sponsored accounts, resulting in hundreds of dollars worth of charges per year.
These fees can include, but aren’t limited to, out-of-network ATM fees, balance inquiry charges, monthly account maintenance fees and overdraft fees, which commonly cost around $34 per transaction.
Education regulations require college-sponsored accounts to be in the “best financial interest” of students.
If you think the account your college sponsors is unfair you can file a complaint with your school or the CFPB.
Despite the perception that higher education at public, state-run institutions is often cheaper, new data found a number of public universities across the United States charge formidable fees for out-of-state students.
Recent research also reveals that many students and post-graduates are struggling financially, taking on multiple jobs and becoming increasingly less satisfied with the lifetime financial benefits of obtaining a degree.
Additionally, a staggering proportion of young non-homeowners suggest significant student loan debts are one of the primary reasons they have delayed making a downpayment on their first home.
While personal student loans and credit cards can help, beware of missed payments and extra fees and taxes. Compare a range of providers and check out our guide to discover the best options to get you back in the black.