The US Government Accountability Office (GAO) has recommended certain changes to the campus debit card system, which electronically caters to the college students’ financial aid.
The GAO stated that the use of debit cards has significantly increased over the past decade. It found that 11% of colleges and universities had agreements to provide debit or prepaid card services to their students as of July 2013.
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Most of the institutions were found to offer students the ability to receive federal student aid and other payments on a card.
The schools outsourced to their card provider the process for paying financial aid and other funds through college cards and other methods as well as used college cards as student identification.
GAO noted that fees charged by college card providers were similar to that provided by banks, although some college card fees were slightly higher than those of credit unions.
The agency recommended Congress to consider requiring that financial firms providing debit and prepaid card services to colleges to file their agreements for public review and provide other relevant information.
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By GlobalDataIt urged the Department of Education to specify what constitutes convenient access to ATMs or bank branch offices for students receiving federal student aid funds and develop requirements for schools and card providers to present neutral information to students about their options for receiving federal student aid funds.
