Trump administration piloting student loan ‘debit’ cards
A debit-like payment card for federal student loan money is in the works.
The federal government is trying to keep up with the fast pace of technological advancements in the financial world, and its “next generation” solution to student loans is the proposed Federal Student Aid Payment Card.
Expected to launch as a pilot program late this spring, the FSA Payment Card is designed to operate like a debit card after being loaded with student loan funds leftover after paying college tuition and fees, according to a request for contractor support to develop the program.
A select number of schools will participate in the pilot, which will feature a mobile or online application, no fees and app-based check issuance.
While the government will get new access to data that shows how students spend their loan money, the pilot specifies that customers will have the authority to grant or deny permission for their data to be shared.
The FSA Payment Card pilot aims to:
- Help students understand the financial implications of their loan debt.
- Simplify and streamline the FSA loan process.
- Integrate innovative new technologies as they’re developed.
- Provide real-time education and counseling through the mobile app.
The pilot program is part of a plan to develop a larger myStudentAid “super portal” app that would provide current and prospective college students with an online FAFSA form, customized school content, a student aid checklist, a rewards program and the ability to manage student loans.
The innovation comes at a time when college students are facing a monumental debt epidemic that is hampering graduates’ ability to save for a down payment on a home. Learn more about the growing problem through our recent snapshot of nationwide student debt, and compare your options for student loans, refinancing and debt consolidation in our comprehensive guide to student loans.