Financial Aid Debit Card Fees To Watch Out For

by A Guest Author

Financial Aid Debit CardsAbout two-thirds of all full-time undergraduate students receive financial aid when attending a community college, vocational school, or university. Financial aid can come in the form of grants, scholarships, student loans, and even work-study. The financial aid a student receives helps them pay for their cost of books, supplies, housing, and other expenses they will incur while they are in school.

If you receive financial aid, you know that you look forward to the day when your financial aid will be disbursed to you. Some colleges will issue your award in the form of a check and others will directly deposit the funds into a bank account when you have the account on file. In an attempt to reduce the amount of money colleges spend on disbursing funds, some institutions are now sending students debt cards where they can access their money.

While you might think that depositing your funds on a debit card sounds convenient, the fees associated with the cards could be eating up your financial aid. Make sure you understand how fees will be charged and save money by staying informed.

Colleges Are Switching to More Modern Disbursal Methods

When you are approved for financial aid, your school will give you a disbursement schedule so that you know when to expect payment. In most cases, a portion of the funds will be paid a few weeks after the semester starts and another portion will be sent at the end of the semester. To cut down on the cost of cutting and mailing checks, colleges are now issuing debit cards from providers like Higher One to the students. While the college will save between $5 and $10 per check, using cards from providers like Higher One will cost the student about $49 a year on average. The modern disbursal methods may be benefiting the colleges, but they are not benefiting the students.

Some Fees You Can Expect to Pay

Higher One was recently ordered to return $11 million to students who were charged insufficient funds fees for using their financial aid debit card. While the students have received a credit, players in campus debit cards are still making money charging the cardholders fees they might not be aware of. The fees depend on the card issuer.

  • Some providers will charge 50 cents every time a card is used.
  • Others will charge inactivity fees if the account is not used monthly.
  • Many charge ATM fees if students don't use the free ATMs scattered about.

With more than 9 million students receiving their aid on debit cards, you can see how the card issuers are making a pretty penny just by charging innocent students exorbitant fees that can be avoided.

Monitor Your Transactions

As you may know, studying can take all of your focus. While you might be busy, you are going to need to closely monitor your account if you have a campus debit card. If you cannot closely monitor your account, expect to be charged fees that you did not budget to pay for.

Just because a college might encourage you to accept the debt card, choosing to have your check mailed to you is often the best option. When you have your check in hand, you can deposit it into your bank account or cash the check at the bank and keep your cash without a greedy card issuer trying to take the money you need to survive while you are in school.

About The Author

This article was written by Karl Stockton for the team at Kanetix. People can compare credit cards with confidence at Kanetix.

This post was written by A Guest Author

This post was written by a guest author. If you have high quality, useful information to share with students, send us an email or click Write For Us to learn more. And in case you're wondering - yes, you can promote yourself in this fancy author byline.

{ 1 comment… read it below or add one }

Stacy Williams September 20, 2012 at 9:48 pm

Nice color choice on the blog. It is really easy on my eyes and I have bad eyes too so that’s a really big compliment lol


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