From dorm and building access, to discounts for movie tickets and accessing the meal plan, a student's ID card is a nearly indispensable part of campus life. But at a growing number of colleges, those same ID cards are taking on a whole new slew of functions, including serving as debit and bank cards.
Allowing students to use their ID cards to purchase books or take out cash from an ATM sounds nice and convenient . But in reality, it's indicative of a larger willingness by schools to sell anything for a profit, no matter what the downsides are for their students.
According to CR80News, an online ID technology publication, there are 127 schools with bank-ID partnerships, including most of the largest public universities in the country. At institutions like Portland State University in Oregon, students are provided an ID card that automatically comes with a credit card company's logo. A slight variation is offered by colleges like the University of Minnesota, where students can use their "U Cards" as calling cards and to access funds at ATMs but not for purchases.
All Portland State students wishing to use the card still have to activate it on a site run by Higher One, the affiliated company. There's no requirement to use the debit feature but doing so is strongly promoted. A cheesy company infomercial shown to incoming students actively discourages them from shopping around. "When you were accepted into this school, you were automatically approved for a new One Account, so there's no reason to go open a new checking account," Chris, the company's student liaison, says repeatedly throughout the video.
What about those students who don't want to be so aggressively steered toward a specific bank? Well, they have the option of getting a non-debit card -- for a fee.
So everyone's a winner, right? Not exactly. Although Higher One promises students that they "cannot go into credit card debt with this," there are still a litany of fees students are assessed, including ATM surcharges and overdraft payments. These can be pretty high. USA Today reported that one Portland State student was hit with $150 in charges for two overdrafts.
Fees aren't the only way these banks can leverage their exclusive deals with colleges to exploit students. Having access to a large number of student deposits provides banks with personal and purchasing information that they can use for targeted marketing of other services, including credit cards.
To read more, please visit www.HigherEdWatch.org