Students seek financial transparency from college administrators
Letters sent at 20 universities seeking information about financial deals
Students from 20 colleges and universities across the county delivered letters to their school administrators Thursday asking for greater transparency about school partnerships with financial institutions.
Under the Credit Card Accountability, Responsibility and Disclosure (CARD) Act, colleges and universities are required to disclose information about college credit cards. However, students want administrators to take that a step further and disclose all bank and financial institution partnerships that exist on their campuses.
"Students are a very financially vulnerable population," said Kaitlyn Griffith, a student participant at the University of Denver. "We are still trying to find our sea legs in the financial world, so to speak, so any kind of financial transparency will only help us be prepared to make decisions that will benefit us in the long run."
The letters distributed Thursday asked for more information about student-centric products such as debit and prepaid cards, preferred private student loans and financial aid disbursement. Students are concerned that they are entering into agreements with financial institutions under the impression that schools are independently advocating for a particular bank or service, not because they are being compensated for doing so.
"Disclosing that information respects the humanity of students and doesn't treat them as a product that can be sold between the financial institutions and the school," Griffith said. "It would be valuable to know when the university is making a profit off me."
This student action is in response to mounting concerns about the kickbacks schools may receive from banks that sell products or operate on campus.
It would be valuable to know when the university is making a profit off me.
|-- Kaitlyn Griffith
Student, University of Denver
Financial institutions have shifted from offering credit cards on campus to marketing products and services that don't fall under federal disclosure requirements, a Consumer Financial Protection Bureau report issued in December found. This change in behavior has some officials concerned.
"Students and their families should know if their school, whether well-intentioned or not, is being compensated to encourage students to use a specific account or card product," CFPB Director Richard Cordray said in a written statement that accompanied the December report. "When financial institutions secretly give kickbacks to schools, they are engaging in risky practices."
Echoing these concerns, the U.S. Government Accountability Office released a report on Feb. 13 titled, "College Debit Card: Actions Needed to Address ATM Access, Student Choice, and Transparency," outlining consumer concerns related to fees passed onto students, a lack of free ATM access, and a host of other issues. The report recommended that debit and prepaid card providers be required to file their college financial agreements with the CFPB for public review.See related: Once secret credit card-college marketing deals to be revealed, Students, credit cars and the new reform law: the fine print, GAO urges changes in college-provided debit cards
Published: March 6, 2014
- Q&A with Tony Robbins on becoming "Unshakeable" – Learn from the country's top life and business strategist on the keys to building wealth when it comes to investing and how to find financial security ...
- Students steered toward high-fee bank accounts, CFPB warns – Banks, colleges team up against unsophisticated kids ...
- 4 warning signs your college student is racking up card debt – If your child is already in debt, or uncomfortable talking about finances, that's a yellow flag ...