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United States Government Accountability Office: 
GAO: 

Report to the Chairman, Committee on Health, Education, Labor, and 
Pensions, U.S. Senate: 

February 2014: 

College Debit Cards: 

Actions Needed to Address ATM Access, Student Choice, and Transparency: 

GAO-14-91: 

GAO Highlights: 

Highlights of GAO-14-91, a report to the Chairman, Committee on 
Health, Education, Labor, and Pensions, U.S. Senate. 

Why GAO Did This Study: 

A growing number of colleges and universities have entered into 
agreements with financial firms to provide debit and prepaid card 
services for students. As the number of agreements has grown, 
questions have arisen over fees and issues such as student choice. 
This report examines (1) the functions of college cards and the 
characteristics of schools and card providers offering the cards; and 
(2) benefits and concerns regarding these cards. GAO reviewed relevant 
federal laws and regulations, developed a tally of card agreements by 
reviewing industry reports and school and provider websites, and 
analyzed data and interviewed officials from federal agencies, banks 
and other financial firms, students, and industry and consumer groups. 
GAO selected nine schools (which vary by program length and sector) 
for extended interviews and data collection. 

What GAO Found: 

At least 852 schools, or 11 percent of U.S. colleges and universities, 
had agreements to provide debit or prepaid card services to their 
students as of July 2013, and most offered students the ability to 
receive federal student aid and other payments on a card. These 
schools were disproportionately large; their enrollments constituted 
about 40 percent of all postsecondary students. However, the 
percentage of students enrolled in their schools' college card 
programs was unknown. In the majority of agreements, the schools also 
outsourced to their card provider the process for paying financial aid 
and other funds via college cards and other methods. Some schools also 
used college cards as student identification. The dominant provider 
was Higher One, a nonbank financial firm that had a 57 percent market 
share in 2013, as measured by number of card agreements. 

Benefits of college cards can include convenience for students and 
cost savings and efficiencies for schools, but concerns exist in a 
number of areas: 

* Fees. GAO found that fees charged by college card providers 
generally were comparable with those for similar products provided by 
banks, although some college card fees were slightly higher than those 
of credit unions. However, two large providers charged a fee for card 
purchases using a personal identification number (PIN) rather than a 
signature—-a fee mainstream debit cards typically do not charge. The 
total fees students pay are not known, and some providers declined or 
said they were unable to provide these data to GAO. In 2012, Higher 
One settled with the Federal Deposit Insurance Corporation, which 
alleged unfair and deceptive practices that resulted in consumers 
paying higher fees. 

* ATM access. Officials at nine selected schools generally did not 
report significant issues with the availability of fee-free automated 
teller machines (ATM) on campus. Although Department of Education 
regulations for college cards require that schools ensure “convenient 
access” to fee-free ATMs or bank branches for students receiving 
federal student aid payments, the agency has not specified what 
constitutes this level of access. The lack of a more specific 
definition may make avoiding unnecessary fees difficult for students 
when making cash withdrawals of federal aid. 

* Neutrality. GAO found instances in which schools or card providers 
appeared to encourage students to enroll in a college card rather than 
present neutral information about payment options. The financial 
marketplace functions best when consumers are fully informed and have 
unbiased information. However, schools may have incentives to 
influence student choice because some receive payments from card 
providers based on the number of card accounts or transactions, 
leading some consumer advocates to question whether schools always act 
in their students' best interests. Furthermore, the contracts between 
schools and card providers are not publicly available and data on 
these cards are limited, in contrast to another college-related 
product—affinity credit cards bearing the institution's name or logo—
for which key information must be disclosed. Increased transparency 
for college card agreements could help ensure that the terms are fair 
and reasonable for students and the agreements are free from conflicts 
of interest. 

What GAO Recommends: 

Congress should consider requiring that financial firms providing 
debit and prepaid card services to colleges file their agreements for 
public review and provide other relevant information. The Department 
of Education should (1) specify what constitutes convenient access to 
ATMs or bank branch offices for students receiving federal student aid 
funds and (2) develop requirements for schools and card providers to 
present neutral information to students about their options for 
receiving federal student aid funds. The Bureau of Consumer Financial 
Protection agreed with GAO's matter for Congress. Education agreed 
with GAO's recommendations to it and said it will address these issues 
in an upcoming process to develop new rules. 

View [hyperlink, http://www.gao.gov/products/GAO-14-91]. For more 
information, contact Alicia Puente Cackley at (202) 512-8678 or 
cackleya@gao.gov; or Melissa Emrey-Arras at (617) 788-0534 or 
emreyarrasm@gao.gov. 

[End of section] 

Contents: 

Letter: 

Background: 

College Cards Are Used for Multiple Purposes and Are Offered by At 
Least 852 Schools: 

College Cards Can Benefit Students and Schools, but Concerns Exist 
about Fees, Student Choice, and Transparency: 

Conclusions: 

Matter for Congressional Consideration: 

Recommendations for Executive Action: 

Agency Comments: 

Appendix I: Objectives, Scope, and Methodology: 

Appendix II: Comparison of Student Payments by College Cards with 
Other Federal Benefits Distributed by Prepaid or Electronic Benefit 
Cards: 

Appendix III: Comparison of College Card Fees among Providers, Other 
Institutions, and Account Types: 

Appendix IV: Federal Provisions Addressing Debit and Prepaid Cards: 

Appendix V: Comments from the Department of Education: 

Appendix VI: Comments from the Bureau of Consumer Financial Protection: 

Appendix VII: GAO Contacts and Staff Acknowledgments: 

Tables: 

Table 1: Selected Requirements of Department of Education for Use of 
Debit and Prepaid Cards: 

Table 2: Comparison of Selected Account Fees, by Provider Type, as of 
August-September 2013: 

Table 3: Institutions Selected for Extended Review, by Card Type and 
Services Offered: 

Table 4: Description of Selected Federal Program Benefits Issued on 
Prepaid or EBT Cards: 

Table 5: Fees for College Cards, by College Card Provider and Type, as 
of August-September 2013: 

Table 6: Fees for Other Banking Products Available to Students, by 
Provider and Type, as of August-September 2013: 

Table 7: Federal Provisions Addressing Debit and Prepaid Cards: 

Figures: 

Figure 1: Overview of Process for Paying Financial Aid and Other Funds 
to Students: 

Figure 2: Prevalence of College Card Agreements by Number of Schools 
and Number of Students, as of July 2013: 

Figure 3: Percentage of Schools with College Card Agreements, by 
Sector and Program Length, as of July 2013: 

Figure 4: College Card Providers, by Provider Type, Type of Card 
Offered, and Market Share, as of July 2013: 

Abbreviations: 

ATM: automated teller machine: 

CFPB: Bureau of Consumer Financial Protection: 

EBT: electronic benefit transfer: 

FDIC: Federal Deposit Insurance Corporation: 

FERPA: Family Educational Rights and Privacy Act: 

FTC: Federal Trade Commission: 

IPEDS: Integrated Postsecondary Education Data System: 

NACUBO: National Association of College and University Business 
Officers: 

PIN: personal identification number: 

PIRG: U.S. Public Interest Research Group: 

SNAP: Supplemental Nutrition Assistance Program: 

TANF: Temporary Assistance for Needy Families: 

WIC: Special Supplemental Nutrition Program for Women, Infants, and 
Children: 

[End of section] 

United States Government Accountability Office: 
GAO:
441 G St. N.W. 
Washington, DC 20548: 

February 13, 2014: 

The Honorable Tom Harkin: 
Chairman: 
Committee on Health, Education, Labor, and Pensions: 
United States Senate: 

Dear Mr. Chairman: 

In recent years, a growing number of schools have begun offering 
banking products to their students in the form of debit and prepaid 
cards issued through agreements with financial services providers. 
These college cards provide students with debit or checking account 
services, but also can serve as student identification cards or be 
used to deliver student aid. Some federal agencies, consumer advocacy 
groups, and members of Congress have raised concerns over issues 
associated with college cards, such as the fees students can incur, 
including when accessing federal student aid. In fiscal year 2012, the 
Department of Education (Education) administered federal student aid 
programs that provided about $142 billion in grants and loans to 15 
million students.[Footnote 1] 

In this report, we review issues related to college debit and prepaid 
card agreements, examining (1) the functions of college cards and the 
characteristics of schools and card providers offering the cards, and 
(2) benefits and concerns regarding these cards. To characterize the 
college card marketplace and examine issues surrounding use of the 
cards, we reviewed relevant federal laws and regulations and 
documentation from federal agencies, including Education, the Federal 
Deposit Insurance Corporation (FDIC), the Bureau of Consumer Financial 
Protection (also known as CFPB), and the Board of Governors of the 
Federal Reserve System (Federal Reserve). We also interviewed 
representatives of these agencies. We collected and analyzed 
information on schools' agreements with college card providers and 
developed a tally of current card agreements by reviewing industry 
reports, interviewing college card providers, and obtaining 
information from school and provider websites. We also used data from 
Education's Integrated Postsecondary Education Data System (IPEDS) to 
analyze the student and institutional characteristics of these schools 
and compare them with the overall college and university population. 
We assessed the reliability of the IPEDS data by reviewing 
documentation about the systems used to produce the data and 
considering our previous use of the data, and we determined that the 
data were sufficiently reliable for our reporting purposes. 

We selected nine institutions with college card agreements for 
extended interviews and data collection. We selected this 
nongeneralizable sample by focusing on schools with larger enrollments 
and higher proportions of students receiving federal student loans, 
and included a mix of school types (2- and 4-year, public, nonprofit, 
and for-profit) and geographic locations.[Footnote 2] We examined 
online and paper materials provided to students at these nine schools, 
and we reviewed card agreements from five of them, representing about 
51 percent of the student population at the nine schools. We 
interviewed student government leaders at five of these schools where 
we could arrange meetings with students. In addition, we interviewed 
representatives of eight banks and financial firms that are the 
largest providers of college cards, composing about 90 percent of the 
market we identified. We reviewed college card contracts and other 
publicly available information on cardholder fees for these eight 
providers. For comparison purposes, we reviewed information on fees 
for similar checking accounts from five other large national banks and 
average credit union account fees published by the Credit Union 
National Association. We reviewed documentation from other federal 
programs that distribute benefits electronically on cards, including 
those administered by the Departments of Labor, Agriculture, Health 
and Human Services, and the Treasury. We also interviewed industry 
executives and consumer advocates. See appendix I for a detailed 
discussion of our scope and methodology. 

We conducted this performance audit from November 2012 to February 
2014 in accordance with generally accepted government auditing 
standards. Those standards require that we plan and perform the audit 
to obtain sufficient, appropriate evidence to provide a reasonable 
basis for our findings and conclusions based on our audit objectives. 
We believe that the evidence obtained provides a reasonable basis for 
our findings and conclusions based on our audit objectives. 

Background: 

Schools with college card agreements generally provide students with 
access to either a debit or prepaid card. Each type of card offers a 
cashless means to make purchases and access funds, but there are key 
differences between them.[Footnote 3] 

* A debit card is issued by a bank and linked to a customer's checking 
account. It allows the customer to withdraw cash from the account or 
to pay for goods and services. In a debit transaction, the amount of 
the transaction is withdrawn from the available balance in the 
cardholder's account. 

* Prepaid cards appear and function much like a debit card, but are 
not linked to an individual consumer's bank account.[Footnote 4] 
Instead, an amount is deposited into a pooled account, and withdrawals 
or purchases are made against the predeposited amount. Prepaid cards 
can be single-use or reloadable. Both banks and nonbank financial 
firms issue prepaid cards, but banks issue the majority of them, 
according to FDIC. 

Schools can use college cards to make payments to students, such as 
financial aid or tuition refunds when a student withdraws from a 
class.[Footnote 5] The majority of financial aid is provided by 
federal student loan and grant programs, although students also can 
obtain aid from states, school grants, and other sources. Federal 
student aid can be used to pay for tuition and fees, room and board, 
books, supplies, and other living expenses. The aid is generally paid 
directly to the school, which deducts its charges, such as tuition and 
fees. If a student's total payments from all sources, including 
financial aid, exceed the school's charges, the school pays the 
difference (also known as a credit balance or credit balance refund) 
to the student. The bulk of the funds paid to students may be federal 
student aid remaining after paying for tuition and fees, and the money 
is intended to help students pay for nonschool items related to their 
education, such as living expenses and transportation costs. Figure 1 
depicts the process for paying financial aid and other funds to 
students. Schools can manage these payments themselves or contract 
with a third party to administer the process. 

Figure 1: Overview of Process for Paying Financial Aid and Other Funds 
to Students: 

[Refer to PDF for image: process illustration] 

1. Eligible student awarded federal student aid, and may also receive 
other funds, such as state or private grants, or refunds of school 
charges. Federal student aid often the largest component. 

2. School applies total student aid against charges, such as tuition, 
fees, and room and board. 

3. After school charges paid, positive balance, or "credit balance," 
may remain. 

Example: 
Aid awarded: $11,500; 
Tuition and fees: $10,000; 
Credit balance: $1,500. 

4. If positive balance, "credit balance refund" due to student. 
Positive balance: Student receives refund; 
Negative balance: Student owes outstanding balance. 

5. Refund can be paid via paper check; electronic transfer of funds, 
such as a college card or direct deposit to existing account; or cash. 

Source: GAO analysis of Education guidance. 

[End of figure] 

When a school pays federal student aid funds to a student, the process 
is subject to Department of Education requirements, which are aimed at 
ensuring that students receive the funds in a timely and effective 
manner.[Footnote 6] For example, Education requires schools to pay any 
federal student aid funds that exceed the school's charges directly to 
students as soon as possible, but no later than 14 days after the 
first day of classes or the date the funds were posted to the 
student's account (whichever occurs later). Schools must pay these 
funds to students in cash or by check or electronic transfer to either 
a bank account, a checking account that can be accessed by a debit 
card, or a prepaid card. 

Furthermore, schools that use debit and prepaid cards to pay federal 
student aid funds must follow additional requirements. As shown in 
table 1, Education's requirements focus on ensuring that students have 
free access to federal student aid and are not forced to use a 
particular debit or prepaid card. And if schools contract with a bank 
or financial firm to manage the payment of federal aid to students, 
Education requires schools to ensure that the contractors comply with 
applicable regulations and provisions for federal aid. Education also 
encourages, but does not require, schools to annually disclose a 
breakdown of the average annual costs their students incur in using 
college cards.[Footnote 7] 

Table 1: Selected Requirements of Department of Education for Use of 
Debit and Prepaid Cards: 

Feature or characteristic: Student consent; 
Guidance/requirement for school: Schools must obtain consent from 
student or parent to open a bank account or load funds onto a prepaid 
card. If student does not consent to receiving funds on a debit or 
prepaid card, school must pay the student by cash, check, or 
electronic transfer to the student's bank account. 

Feature or characteristic: Notifications; 
Guidance/requirement for school: Before the student account is opened, 
schools must inform students of terms and conditions of the account or 
prepaid card, including fees and other costs. 

Feature or characteristic: Protections; 
Guidance/requirement for school: Funds must be held in an insured 
account (by the Federal Deposit Insurance Corporation or National 
Credit Union Share Insurance Fund). 
Debit or prepaid cards cannot be marketed or portrayed as credit cards 
and cannot subsequently be converted to credit cards. 

Feature or characteristic: Prohibited fees; 
Guidance/requirement for school: Schools must ensure students or 
parents do not incur costs when opening accounts or initially 
receiving debit or prepaid cards to access federal student aid funds. 

Feature or characteristic: Access to funds; 
Guidance/requirement for school: Debit and prepaid cards must be 
convertible to cash and widely usable (institution may not limit use 
of cards to particular vendors). 
Students must have convenient access on (or "immediately adjacent" to) 
campus to branch offices or automated teller machines (ATM) of the 
banks or financial firms with which accounts were opened, so that 
students do not incur fees when making cash withdrawals from those 
offices or ATMs. 

Source: GAO analysis of federal regulations. 

Note: In particular, see 34 C.F.R. 668.164(c)(2)-(3); Department of 
Education, Office of Postsecondary Education, Responses to Recent, 
Recurring Federal Student Aid Questions, "Dear Colleague" Letter GEN-
05-16 (Oct. 27, 2005). 

[End of table] 

In addition to Education's requirements, other federal laws and 
regulations provide consumer protections applicable to all debit and 
prepaid cards. For example, Section 5 of the Federal Trade Commission 
Act prohibits unfair or deceptive acts or practices.[Footnote 8] The 
act applies to banks, as they are engaged in interstate commerce, and 
federal banking agencies have authority to enforce Section 5 against 
entities they supervise. CFPB has authority to enforce prohibitions on 
unfair and abusive acts against certain institutions and service 
providers. Regulation E, which implements the Electronic Fund Transfer 
Act, includes disclosure requirements and limits on cardholder 
liability for debit cards (but not prepaid cards).[Footnote 9] (For 
more information on federal protections for debit and prepaid card 
users, see appendix IV.) CFPB has authority to enforce the Electronic 
Fund Transfer Act and certain other federal consumer financial laws 
against certain institutions and service providers, while ensuring 
that consumers can access financial products and services.[Footnote 
10] CFPB also can issue rules and examine certain institutions. 

College Cards Are Used for Multiple Purposes and Are Offered by At 
Least 852 Schools: 

College cards offer a range of financial services to students, 
including delivering financial aid and making other payments. Of about 
7,600 colleges and universities participating in federal student aid 
programs, we found 852 (11 percent) had college card 
agreements.[Footnote 11] Because these schools were generally larger, 
their student populations represented about 40 percent of total 
enrollment. However, even when schools have college card agreements, 
not all students participate in their school's card program. One 
provider, Higher One, had more than half the market for college cards. 

College Cards Can Be Used for Several Functions: 

College cards can be used for different functions, which vary 
depending on the school and the provider: 

Financial services. About 80 percent of college card agreements we 
identified were for debit cards, with the remainder for prepaid cards. 
[Footnote 12] The cards can provide the same functions of standard 
debit or prepaid cards, which include the ability to withdraw funds 
from an ATM and make purchases in stores and online. Debit cards link 
to a standard bank account, with check-writing capability and access 
to services at the bank's branch locations. 

Paying Financial Aid and Other Funds to Students. College debit and 
prepaid cards can be used to deliver federal student aid or make other 
payments. As part of its card agreement, the school can contract with 
the card provider to administer the student payment process on the 
school's behalf. Generally, students can elect to have their funds 
deposited to the account associated with their college card, or they 
can choose to receive their funds by direct deposit to another account 
or in cash or by paper check. More than 80 percent of the schools we 
identified with card agreements indicated that students could use 
their cards to receive financial aid and other funds from the school. 
[Footnote 13] By school sector, this included 88 percent of public 
schools with card agreements, 70 percent of nonprofit schools, and 100 
percent of for-profit schools. (See appendix II for a discussion of 
other federal programs that use prepaid or electronic benefit cards to 
provide payments to beneficiaries.) 

Student ID card. In one-third of schools we identified with card 
agreements, the student's ID also can be used to access banking 
services. In these cases, either the school or the card provider 
issues student ID cards to all students. Students then can choose 
whether to have their ID card also serve as a debit or prepaid card. 

At Least 852 Schools, Including Many Large Public Colleges, Have 
College Card Agreements: 

In our review of industry reports and school and provider websites, 
and our interviews with card providers, we identified 852 U.S. 
colleges and universities with college card agreements as of July 
2013, representing about 11 percent of all schools participating in 
federal student aid programs.[Footnote 14] However, schools that have 
adopted college cards were disproportionately large--the enrollment at 
these schools represented about 39 percent of all students at schools 
participating in federal student aid programs (see figure 2). In 
particular, 12 of the 20 largest schools by enrollment had college 
card agreements.[Footnote 15] 

Figure 2: Prevalence of College Card Agreements by Number of Schools 
and Number of Students, as of July 2013: 

[Refer to PDF for image: 2 concentric circles containing data] 

By number of schools: 
7,559 schools participating in federal student aid programs; 
852 (11%) schools with agreements. 

By number of students: 
25.5 million students at schools participating in federal student aid 
programs; 
10 million (39%) students at schools with agreements. 

Sources: GAO analysis of Education data, industry reports, and school 
and provider information. 

[End of figure] 

We found card agreements were most common at public colleges and 
universities. About 29 percent of public schools had card agreements, 
compared with 6.5 percent of nonprofit schools and 3.5 percent of for-
profit schools. In each school sector, 4-year schools also were more 
likely to have agreements than 2-year or less than 2-year schools (see 
figure 3). For the student characteristics of age, race, and financial 
aid status, we found that schools with college card agreements 
generally were similar to schools without agreements.[Footnote 16] 

Figure 3: Percentage of Schools with College Card Agreements, by 
Sector and Program Length, as of July 2013: 

[Refer to PDF for image: horizontal bar graph] 

Type of school: Public (601 agreements): 
All schools: 29.2%; 
4-year: 36.4%; 
2-year: 31.5%; 
Less than 2 year: 0.4%. 

Type of school: Nonprofit (127 agreements): 
All schools: 6.5%; 
4-year: 7.7%; 
2-year: 0%; 
Less than 2 year: 0%. 

Type of school: For-profit (124 agreements): 
All schools: 3.5%; 
4-year: 7.9%; 
2-year: 5.5%; 
Less than 2 year: 0.3%. 

Sources: GAO analysis of Education data, industry reports, and school 
and provider information. 

[End of figure] 

Comprehensive data are not available on how many students choose to 
enroll in a college card. We found a range of adoption rates among 
schools and providers we interviewed. For example, the largest 
provider reported that overall, 43 percent of students receiving 
financial aid payments at its client schools opened debit accounts. 
However, the adoption rate varied considerably by school--for example, 
20 percent of participating students at one school with which we spoke 
opted to open accounts, compared with 75 percent at another school. At 
some schools, officials told us that only students who were expected 
to receive payments were offered cards.[Footnote 17] Conversely, other 
school officials told us that all students received cards, but 
students might be less likely to activate cards if they did not 
believe they would receive a payment from the school. 

Our analysis showed that public 2-year schools, or community colleges, 
represented almost half of all schools that used college cards to make 
financial aid and other payments to students. According to the 
National Association of College and University Business Officers 
(NACUBO), community college students are among those more likely to 
receive a financial aid payment because they generally have low 
tuition and fees to deduct from students' available financial aid 
funds. In turn, according to NACUBO, community college students are 
more likely to obtain funds through a college card than other students. 

One Nonbank Financial Firm Had More Than Half of the College Card 
Market: 

As of July 2013, one provider, Higher One Holdings, Inc., held about a 
57 percent share of the college card market, as measured by number of 
agreements between schools and card providers, as well as number of 
students at schools with agreements, according to our analysis. Seven 
other providers, which included bank and nonbank providers, 
represented most of the rest of the market (see figure 4).[Footnote 18] 

Figure 4: College Card Providers, by Provider Type, Type of Card 
Offered, and Market Share, as of July 2013: 

[Refer to PDF for image: 2 pie-charts with associated data table] 

Card provider: Higher One; 
Provider type: Nonbank; 
Share of market (based on card agreements): 57%; 
Share of market (based on students): 56%; 
Service: 
Debt: [Check]; 
Prepaid: [Empty]; 
Financial aid and other student payments: [Check]. 

Card provider: U.S. Bank; 
Provider type: Bank; 
Share of market (based on card agreements): 7%; 
Share of market (based on students): 8%; 
Service: 
Debt: [Check]; 
Prepaid: [Check]; 
Financial aid and other student payments: [Check]. 

Card provider: Sallie Mae[A]; 
Provider type: Nonbank; 
Share of market (based on card agreements): 7%; 
Share of market (based on students): 5%; 
Service: 
Debt: [Empty]; 
Prepaid: [Check]; 
Financial aid and other student payments: [Check]. 

Card provider: PNC; 
Provider type: Bank; 
Share of market (based on card agreements): 6%; 
Share of market (based on students): 4%; 
Service: 
Debt: [Check]; 
Prepaid: [Check]; 
Financial aid and other student payments: [Check]. 

Card provider: Wells Fargo; 
Provider type: Bank; 
Share of market (based on card agreements): 5%; 
Share of market (based on students): 8%; 
Service: 
Debt: [Check]; 
Prepaid: [Empty]; 
Financial aid and other student payments: [Check]. 

Card provider: Citibank; 
Provider type: Bank; 
Share of market (based on card agreements): 4%; 
Share of market (based on students): 6%; 
Service: 
Debt: [Empty]; 
Prepaid: [Check]; 
Financial aid and other student payments: [Check]. 

Card provider: Heartland; 
Provider type: Nonbank; 
Share of market (based on card agreements): 4%; 
Share of market (based on students): 2%; 
Service: 
Debt: [Empty]; 
Prepaid: [Check]; 
Financial aid and other student payments: [Check]. 

Card provider: Blackboard; 
Provider type: Nonbank; 
Share of market (based on card agreements): 3%; 
Share of market (based on students): 2%; 
Service: 
Debt: [Empty]; 
Prepaid: [Check]; 
Financial aid and other student payments: [Check]. 

Card provider: Other; 
Provider type: Various; 
Share of market (based on card agreements): 8%; 
Share of market (based on students): 10%; 
Service: [Empty]; 
Debt: [Check]; 
Prepaid: [Check]; 
Financial aid and other student payments: [Check]. 

Sources: GAO analysis of Education data, industry reports, and school 
and provider information. 

[A] In May 2013, Higher One announced the acquisition of Sallie Mae's 
Campus Solutions business, which includes college card operations. 

[End of figure] 

Higher One, founded in 2000, is a nonbank financial firm that 
contracts with banks to perform the banking functions associated with 
its college cards, which include providing checking accounts, 
processing wire transfers, supplying cash for ATMs, and issuing cards. 
Higher One provides processing and other administrative services, 
including managing customer service, and is responsible for the 
information technology for managing the accounts. For 2012, Higher One 
reported net income of $36.9 million on revenue of $197.7 million, 
with average annual net income growth of 37 percent over the previous 
3 years. Seventy-six percent of its 2012 revenue derived from accounts 
opened by students and other members of the campus community, 
including accountholder fees and interchange fees.[Footnote 19] 
Company executives have said that interchange revenue accounted for 
between 40 and 50 percent of account revenue through the first three 
quarters of 2013. The company's other sources of revenue include 
managing financial aid and other student payments for schools, and 
providing students and parents with other financial services. In 
addition, Higher One receives fees from its bank partners based in 
part on the amount of deposits in student accounts that these banks 
hold. In May 2013, Higher One announced it acquired the college card 
operations of Sallie Mae, which represented about 7 percent of the 
college card market as measured by the number of schools with 
agreements. While Higher One's main business is college cards, it also 
has been expanding into other school-related areas, such as student 
data analytics.[Footnote 20] 

The six other providers of college cards among the group of eight we 
identified are: 

* U.S. Bank, PNC Bank, Wells Fargo Bank, and Citibank--large banks 
that provide college card services among a number of other financial 
products. 

* Blackboard, Inc.--an education technology and services company, 
whose other products include online learning, campus commerce and 
security, and school communication. 

* Heartland Payment Systems, Inc.--a payments processing firm, active 
in credit, debit, and prepaid card processing, which has expanded into 
the college card marketplace. 

Like Higher One, Blackboard and Heartland use bank partners. Higher 
One and some other providers said they have been seeking to expand the 
number of schools with which they have college card agreements. Some 
of the companies also noted they have been expanding their offerings--
for example, by adding the option of prepaid cards in addition to 
debit cards, or by offering to administer a school's process for 
making financial aid and other student payments. 

College Cards Can Benefit Students and Schools, but Concerns Exist 
about Fees, Student Choice, and Transparency: 

Benefits of college cards can include administrative savings for 
schools and added convenience of use for students. In general, college 
card fees were not higher than those associated with other banking 
products available to students. The largest card provider's practices 
in charging fees, however, were the subject of an FDIC enforcement 
action in 2012, which resulted in a settlement without admission of a 
violation of law. In addition, other concerns with college cards 
include students' access to no-fee ATMs, schools' influence over 
students' banking and payment choices, potential conflicts of interest 
for schools, and the lack of transparency surrounding card agreements. 

Benefits of College Cards Include Reducing School Costs and Offering 
Students Banking Options: 

School officials and college card providers cited several benefits to 
schools of entering into college card agreements: 

* Electronic payment of funds. Several schools told us they contracted 
with a college card provider primarily because they wanted to reduce 
expenses by paying funds electronically rather than by paper check, or 
to avoid the expense of developing an electronic system internally. 
Processing paper checks is costly and labor-intensive, according to 
school officials, with one school official estimating that it cost 
upwards of $25 to issue a paper check. Paper checks are also 
vulnerable to fraud because they can be altered or stolen. 

* Lower administrative costs. Even if schools have the internal 
capability to process funds electronically, college card providers can 
do so more cheaply, or at no expense to the school, according to card 
providers and some schools. Although card providers may charge schools 
for student payment services, officials from two schools told us the 
cost under their card agreements was still less than half what it 
would be to process the same transactions internally. For example, 
officials at one school estimated the school saved about $0.75 on each 
check and $0.15 on each direct deposit by contracting with a provider. 
These small per-transaction differences can produce significant 
savings for schools administering many transactions each year. At one 
of the six schools we reviewed that contracted with a card provider to 
manage student payments, the card provider administered the process at 
no cost to the school.[Footnote 21] 

* Improved student ID cards. College cards can allow schools to expand 
the functionality, or defray the cost, of their student ID cards. For 
example, one school said the electronic building access provided by 
its college card improved security because the previous ID card could 
be altered easily and students were able to access buildings simply by 
showing the card. One college card provider also said it has helped 
schools defray the cost of student ID programs by providing free card 
stock for printing the ID cards. 

* Revenue generation. As discussed later in this report, some college 
card agreements include payments from card providers to schools--for 
example, based on student account activity--or provide other benefits, 
such as administering student payments for schools at nominal rates. 

* Reduced use of cash on campus. Some schools prefer the use of 
college cards at the campus bookstore and other campus locations 
because they find card transactions cheaper and more convenient to 
manage than cash transactions, according to one card provider. 

College cards also can benefit students, according to students, school 
officials, and card providers we interviewed. Benefits they cited 
include the following: 

* Access to banking services. College cards provide a way to enter the 
mainstream banking system for students who do not have bank accounts. 
Evidence suggests that some college students are unbanked--that is, 
they do not have any kind of bank or other deposit account at an 
insured depository institution.[Footnote 22] These students may rely 
on alternative financial providers, such as check cashing services and 
payday lenders, that have higher costs and lack consumer protections 
available with a traditional bank account. For example, officials at 
one school estimated that about 300 of their nearly 15,000 students 
were unable to get a traditional bank account.[Footnote 23] 

* Multipurpose convenience. When banking services are linked to a 
student ID card, students may benefit from using a single card for 
school and banking functions, such as campus building access, library 
book checkout, ATM use, or purchases. 

* Quicker access to funds. When schools outsource the process for 
making financial aid and other payments to a card provider, students 
can get their funds faster, according to card providers and schools. 
Card providers and school officials told us that funds are usually 
available on college cards the same day the school releases funds to 
the provider, compared with availability in 2-3 business days for 
direct deposit to another account, or 5-7 business days for a paper 
check.[Footnote 24] Students generally want to get their funds as 
quickly as possible, according to students and school officials we 
interviewed, because they can face large expenses at the beginning of 
a term for rent, textbooks, and other college costs. 

* Financial education. Some college card providers offer financial 
education and budget tools that can help students manage their 
finances. For example, officials at one school said their college card 
provider offered on-campus financial education sessions for students, 
while officials at another school noted their card provider gave 
students online breakdowns of their spending. One provider has given 
grants for on-campus financial literacy efforts.[Footnote 25] 

Most College Card Fees Are Comparable to Similar Bank Products; PIN 
Fees and ATM Access Are Concerns and Total Fees Paid Are Unknown: 

Fees Generally Comparable to Those Other Institutions Charge, Except 
for PIN Transactions: 

Most of the college card fees we reviewed generally were not higher, 
or in some cases were lower, than those associated with a selection of 
basic or student checking accounts at national banks.[Footnote 26] In 
particular, college card accounts generally did not have monthly 
maintenance fees, while the basic checking accounts we reviewed 
typically did (see table 2). College card fees for out-of-network ATM 
use, wire transfers, and overdrafts also were generally comparable 
with those of banks' basic and student checking accounts. However, 
fees charged by credit unions typically were the same or lower than 
those charged by college cards. In addition, college card fees are 
likely lower than those of alternative: 

financial services, such as check-cashing services, that some students 
without bank accounts might otherwise use.[Footnote 27] See appendix 
III for more detailed information on our fee comparison analysis. 

Table 2: Comparison of Selected Account Fees, by Provider Type, as of 
August-September 2013: 

Fee: Monthly maintenance; 
College cards: $0[B]; 
Large banks, general checking accounts: 
Standard account: $6-$12; 
Student account: $0-$5; 
Credit unions (median fees)[A]: $0. 

Fee: Out-of-network ATM transaction; 
College cards: $2-$3; 
Large banks, general checking accounts: $2-$2.50
Credit unions (median fees)[A]: $1. 

Fee: PIN (personal identification number) transaction; 
College cards: $0-$0.50
Large banks, general checking accounts: $0; 
Credit unions (median fees)[A]: $0. 

Fee: Overdraft[C]; 
College cards: $29-$36; 
Large banks, general checking accounts: $34-$36; 
Credit unions (median fees)[A]: $25. 

Fee: Outgoing wire transfer; 
College cards: $25-$30; 
Large banks, general checking accounts: $24-$30; 
Credit unions (median fees)[A]: $15. 

Source: GAO analysis of provider information. 

[A] Based on survey responses from 1,100 credit unions. Median fee 
amounts are based on credit unions that charged a particular fee. When 
the majority of credit unions did not charge a specific fee, the 
median amount is reported as $0. See Credit Union National 
Association, 2013-2014 Fees Report. Fee information on outgoing wire 
transfers is from the Credit Union National Association's 2011-2012 
fees report because this fee information was not reported in the 2013-
2014 report. 

[B] Higher One's basic account has no monthly fee. The company also 
offers students two other account options, which charge monthly fees 
of up to $5.95 but, among other things, do not charge PIN fees or fees 
on certain ATM withdrawals. Sallie Mae also had charged a $4.95 
monthly maintenance fee for its prepaid college card but sold its 
student card operations to Higher One in 2013. PNC also changes a $5 
monthly fee for its prepaid college card, but this card is only 
offered at two institutions. PNC does not charge students a monthly 
maintenance fee for its more common debit college cards. 

[C] According to the Federal Reserve, an overdraft for a debit card 
account can occur when an accountholder writes a check or makes an 
automatic bill payment or other electronic payment for an amount 
greater than the balance in the account. 

[End of table] 

One area where college card fees can exceed those of traditional bank 
accounts is for purchases made using a personal identification number 
(PIN). Two college card providers--Higher One and Citibank, which 
together represent about 60 percent of the market--charge $0.50 for 
transactions that use PINs rather than signatures.[Footnote 28] No 
basic or student account that we reviewed for comparison purposes 
charged a transaction fee for using the account's debit card. 
Approximately one-third of all PIN transactions are for less than $15, 
according to the Federal Reserve, which can make a $0.50 fee a 
significant cost relative to the amount of the transaction. While 
students can avoid the fee by authorizing their purchase using a 
signature rather than a PIN, the signature option involves using a 
keypad option labeled "credit," which may be confusing because the 
card is a debit card and not a credit card.[Footnote 29] In addition, 
CFPB staff told us that some merchants make selecting the credit 
option more difficult, because debit transactions offer them more 
favorable interchange fees. 

Some federal officials and students have expressed concerns that 
college card fees are too high. In 2012, as part of its process to 
consider new regulations on debit cards, Education received some 
comments criticizing college card fees for being too high, 
unnecessary, and reducing the amount of student aid available to cover 
college costs.[Footnote 30] Some public comments submitted by students 
to CFPB in 2013 also complained about high fees, including the PIN 
debit transaction charge.[Footnote 31] CFPB staff similarly told us 
that while college cards in some cases had higher fees than other 
products, they did not appear to offer any more attractive features. 

Out-of-Network Fees and ATM Access Have Been Raised as Issues: 

Consumer advocates and federal officials also have expressed concerns 
about the extent to which students incur out-of-network ATM charges 
when using their college cards and their ability to access fee-free 
ATMs. As is typical for debit cards in general, all the college card 
providers we reviewed charged no fee for withdrawals from ATMs within 
that card's network. Providers have charged fees up to $3.00 for 
withdrawals from out-of-network ATMs, with the majority charging 
$2.50.[Footnote 32] Additionally, operators of the out-of-network ATMs 
may impose a surcharge of their own, which is typically about $2.00. 
[Footnote 33] One card provider noted that these ATM fees can add up, 
because many college students make frequent ATM withdrawals of small 
sums. 

The number of in-network, fee-free ATMs available to students with 
college cards varies significantly depending on the school and the 
card provider. Our review of nine schools illustrated this variation: 
one large school had 16 in-network ATMs on one campus, while a smaller 
school had one.[Footnote 34] Five of the providers we reviewed also 
had contracts with ATM networks other than their own to provide 
additional fee-free access to students. However, at least one of these 
providers--Higher One--only provides students access to its broader 
fee-free ATM network if they open an account with a monthly 
maintenance fee, potentially reducing any savings realized through the 
improved ATM access.[Footnote 35] 

A 2012 report by the U.S. Public Interest Research Group (PIRG), a 
consumer advocacy organization, also asserted that at some schools, 
students may experience lengthy lines at college card ATMs or have 
limited access to ATMs in school buildings that are not open 24 hours 
a day. Officials at eight of the nine schools with whom we spoke 
generally did not indicate that access to in-network ATMs was a 
significant or widespread issue. One school acknowledged that 
sometimes lines of 20-40 students formed at the ATM on the first day 
that funds were paid to student accounts. We also found that for one 
large provider, 5 percent of its ATMs were accessible 24 hours a day; 
however, the provider noted that it does not control the hours of the 
buildings in which the ATMs are located. 

Education regulations for delivering federal student aid funds on 
college cards require that schools ensure students have "convenient 
access" to ATMs or a branch office where students will not incur any 
costs making cash withdrawals from the bank in which the account was 
opened.[Footnote 36] However, Education has provided a limited 
definition of what constitutes such access--namely, that the branch 
office or ATMs must be located on the institution's campus, in 
institutionally owned or operated facilities, or a location 
immediately adjacent to and accessible from the campus.[Footnote 37] 
Although this definition provides some guidance, it does not take 
account of such factors as actual ATM usage patterns or availability. 
Education staff said that a better definition or more specific 
standards for convenient access to fee-free ATMs may be needed, noting 
concerns that a single on-campus ATM may not be sufficient and could 
result in students incurring unnecessary fees. The department 
announced its intention to develop new regulations for college cards 
in a May 2012 notice, but staff told us they had been focusing on 
other regulatory priorities.[Footnote 38] However, in November 2013 
Education announced formation of a committee to develop proposed 
regulations on college cards and other issues, with the committee 
scheduled to begin work in February 2014.[Footnote 39] Any new 
regulations may address the issue of ATM access and fees, Education 
staff told us. 

Data Unavailable on Total Fees Paid: 

Although college card fee schedules we reviewed generally were not 
higher than those of basic or student checking accounts, little 
information is available on the frequency with which students incur 
ATM, PIN, and other fees, and the total amount of college card fees 
paid by students is unknown. Several college card providers with which 
we spoke generally were unwilling or unable to provide details or a 
breakout of their fee revenues.[Footnote 40] However, one provider 
with a smaller share of the college card market told us that in the 
specific case of student financial aid payments, its experience was 
that students used 82 percent of such funds without incurring fees. 
Although Education encourages schools to disclose annually a breakdown 
of the average yearly costs incurred by their students for using their 
college cards, none of the schools with which we spoke tracked such 
costs. According to FDIC staff, some students have complained of 
paying aggregate fees ranging from hundreds of dollars to more than 
$1,000, but it is unknown whether such fee amounts are typical. 

Moreover, college card providers and school officials noted that 
students can limit fees by adjusting their behavior. For example, 
students can avoid fees in some cases by choosing to authorize debit 
transactions using a signature rather than a PIN, or by avoiding 
withdrawals from out-of-network ATMs. Card providers and schools also 
told us that they help students avoid card-related fees, such as by e-
mailing alerts when account balances are running low or encouraging 
students to avoid PIN-based debit transactions. However, there are 
limitations to any efforts to help individuals improve their financial 
behaviors. Even when given appropriate information, consumers may not 
make the most rational financial choices. Behaviors such as 
procrastination and inertia can mitigate against informed choice. 
[Footnote 41] 

Recently, the largest college card provider faced an administrative 
enforcement action for its fee-charging practices. In August 2012, 
FDIC announced settlements with Higher One and a former bank partner, 
The Bancorp Bank, for alleged unfair and deceptive practices related 
to how Higher One charged fees for its student debit card account 
program, among other things.[Footnote 42] The settlement required 
Higher One to change its practices for charging fees (for example, 
limiting the number of insufficient funds fees charged on a single day 
to a single account) and pay restitution of about $11 million to 
approximately 60,000 students.[Footnote 43] FDIC also imposed civil 
money penalties of $110,000 on Higher One.[Footnote 44] FDIC staff 
told us the restitution payments were made and that the agency 
continues to monitor Higher One's compliance with the consent order. 
Neither Higher One nor The Bancorp Bank admitted to a violation of law 
in settling the charges. 

In addition, Higher One announced in November 2013 that it reached an 
agreement in principle to settle a class action lawsuit for $15 
million.[Footnote 45] The company and two of its business partners 
were named as defendants, with students alleging that Higher One 
misled students by marketing its debit card as schools' preferred 
method for making financial aid and other payments, improperly steered 
them into depositing funds into Higher One accounts, and charged 
excessive and inadequately disclosed ATM and PIN fees. Higher One and 
the other defendants denied that marketing of the Higher One account 
was deceptive and contended that fees were fully disclosed and agreed 
to by the plaintiffs. 

Students May Not Be Offered Neutral Options; Agreements Could Pose 
Conflicts and Are Not Always Transparent: 

Concerns have arisen over some school and industry practices that can 
influence student options, especially when a college card is not 
necessarily the best option for all students. One issue is whether 
students' choice to use a college card is unduly influenced by the 
nature of information they receive about the cards. Another is the 
extent to which schools' decisions to enter into agreements may be 
motivated by benefits the schools receive, rather than the best 
interests of students. However, it is difficult for students and 
others to assess the influence of financial incentives on school 
behavior due to the lack of transparency for card agreements. Federal 
agencies have been reviewing these and other college card issues and 
may take further action. 

College Cards May Not Be the Best Option for All Students: 

According to some school officials and others we interviewed, college 
cards may not be the best product for some students who enter college 
with an existing checking account, or for those who need more 
comprehensive banking services. Students with both a college card and 
a separate account with another bank may find it costly or 
inconvenient to manage both accounts concurrently. For example, 
officials at one school told us that some students with existing bank 
accounts who choose to open a separate college card account can incur 
fees transferring the funds between accounts. 

Some college card products also provide less robust banking services 
and features than a traditional bank account. At its September 2013 
forum on financial products marketed to college students, CFPB noted 
that some student checking products offered by unaffiliated financial 
institutions have more attractive options than some college cards, 
such as automatic reimbursement of any ATM fee charged by an out-of-
network ATM operator. Prepaid cards in particular may be limited 
because they may not offer students the ability to write checks, can 
charge fees for making additional deposits, and provide limited access 
to a full-service financial institution. Even full-featured college 
debit cards can have limitations, such as the lack of conveniently 
located bank branch locations near a student's school or home and 
unresponsive customer service, both of which were cited in public 
comments received by CFPB. 

Presentation of Card and Payment Options Was Not Always Neutral, 
Raising Questions about Student Choice: 

Although schools cannot require students to use college cards, federal 
officials and consumer advocates have raised concerns about the extent 
to which students have been able to make fully informed choices about 
whether to enroll in the debit or prepaid cards their schools offer. 
Schools and college card providers can affect student choices in 
several ways: 

* School endorsement. Schools can appear to implicitly or explicitly 
endorse their college cards, by virtue of the relationship with the 
provider and co-branding of the card. Many students trust their 
schools and, as a result, may view co-branding as an endorsement and 
an indication their school has negotiated the best terms for them. 
Education staff said anecdotal evidence supports that idea, noting 
that students are more likely to sign up for an account when the debit 
and ID functions are on a single card. Student leaders at four schools 
with whom we spoke noted that such co-branding--such as a school 
picture on cards or provider ATMs on campus--gave the appearance of an 
endorsement by the school or the impression that there is only a 
single provider. 

* Exclusivity. Provisions in card contracts that prohibit other 
financial companies from providing services to students on campus can 
limit student choice. Four of the eight card providers with which we 
spoke said that at least some of their agreements with schools include 
such provisions, such as barring other financial services companies 
from locating ATMs or an office on campus or from setting up 
information tables during student orientation.[Footnote 46] 

* Marketing. Card providers and schools market college cards directly 
to students through various methods, including mailings, on-campus 
presentations, and co-branded websites. Some card providers offer 
marketing assistance or materials to schools. For example, one 
provider told us it prefers assisting the school in developing 
messages, because students pay more attention to the information if it 
comes from the schools. Some contracts also call for schools to use 
"best efforts" to promote and encourage use of the provider's account. 
[Footnote 47] 

Our review of marketing materials and other information offered to 
students found variations in the type of information provided to 
students about their financial options. At some schools, students were 
presented with an unbiased presentation of these options. For example, 
one school emphasized that "you have the ability to select the option 
that is best for you," followed by a factual description of payment 
options. Some schools also recommended direct deposit over their 
campus card. However, we also identified instances in which payment 
options were not presented to students in a clear or neutral fashion, 
and appeared to encourage students to choose the college card over 
other options. Among these instances were the following: 

* One provider, on a website on which students can select a method to 
receive financial aid and other payments, displays an option where 
students can immediately select the provider's account. However, 
students who want to select other options must work through additional 
instructions, in which the provider continues to encourage use of its 
product. While the college card payment option can be selected online, 
an option for deposit to another account requires a separate and more 
time-consuming submission of additional documentation. The provider 
told us this requirement is an antifraud measure, but the industry 
organization that oversees such payment processing transactions told 
us deposits to another account can be achieved equally well online. 
[Footnote 48] 

* One school and its provider, under a website heading of "Why should 
I use the Card?" told students that it "makes everyday life easier on 
and off campus." The instructions for receiving funds by paper check 
were less prominent and described a separate, multistep registration 
process. 

* One school directly recommended its college card over the direct 
deposit alternative and gave guidance to students who already had 
selected direct deposit on how to switch to the card option. 

In public comments received by CFPB, some students said they felt 
pressured to sign up for college cards. For example, one student said 
that signing up was "highly encouraged," both during student 
orientation and when provider representatives appeared on campus. 
Another described being pressured by a provider representative even 
after saying she did not plan to sign up. Had she not researched 
options, she said, she might have been convinced the provider was the 
only choice. FDIC staff told us that given current practices, it may 
seem to some students that they must select the school's college card 
to receive their funds. 

Education guidance on college cards does not currently address the 
marketing of the cards or the extent to which schools must inform 
students about financial aid payment options, although schools are 
required to inform students of the terms and conditions of college 
cards before an account is opened.[Footnote 49] CFPB recently issued a 
consumer advisory, reiterating that schools cannot require a 
particular bank or card to access funds, and advising students to shop 
around and use direct deposit to an existing account for receiving 
funds.[Footnote 50] FDIC staff also told us that requiring a clear and 
conspicuous affirmative statement that students have a choice could 
enhance student awareness of options. In addition, in its best 
practices recommendations for college cards, NACUBO called for "a fair 
explanation of services [without] misleading, biased, or aggressive 
marketing schemes." 

Payments to Schools May Create Potential Conflicts of Interest: 

Revenue-sharing agreements appear to be declining, but concerns remain 
that the payments and other benefits schools receive from card 
providers may motivate schools to encourage the use of college cards 
or potentially choose the arrangement that provides the schools the 
most revenue rather than one that provides students the best terms, 
according to federal officials and consumer advocates. These payments 
from providers to schools are generally either a fixed sum or tied to 
the number of card accounts or the number of card transactions 
students make. In addition to direct payments, schools can receive 
other financial benefits from college card providers, such as rent for 
ATMs located on campus, general marketing assistance for the school ID 
card program, or savings on the administrative costs of disbursing 
financial aid. 

We did not identify comprehensive information on the number of schools 
with college cards that receive such payments. Three card providers 
with which we spoke did not have revenue-sharing agreements with any 
of their schools. In our review of nine schools, three had agreements 
with card providers that included revenue-sharing based in part on 
transaction activity or the number of students who open card accounts. 
One school told us that it received $13,000 in 2012, based on $10 for 
each student who activated the college debit card. Another school 
received $137,000 in payments from the card provider in 2012, based on 
a formula that included the total balance of student card accounts and 
the volume of card transactions with vendors. (Partially offsetting 
that, however, was $30,000 the school paid the provider for services.) 
A third school told us it has received an average of about $400,000 
annually over the life of its contract, which is based in part on the 
number of students who opened card accounts. 

In addition, some schools--apart from the nine that we reviewed in 
depth--have more comprehensive agreements with providers for 
activities or financial services in addition to college cards, which 
can provide considerably larger revenue to the schools. For example, 
one large public university has a college card agreement with a 
national bank that includes activity-based revenue sharing. In 2013, 
the bank was to pay a royalty of $34 for each active college card 
account, or a minimum of $1 million annually, according to contract 
documents.[Footnote 51] In addition, the school has another agreement 
with the same bank that provides for $35 million over 25 years for 
such things as naming rights for a football stadium, advertising, and 
other sponsorships. Similarly, in 2012, another large public 
university signed a 15-year deal worth at least $25 million with 
another national bank, which includes providing banking services to 
the university, alumni, and staff and faculty, in addition to 
providing college cards. 

Education staff and some card providers said that revenue-sharing 
agreements for college cards have been declining. Reasons for the 
decline include the negative public attention the practice has 
received and the reduced need for providers to offer revenue-sharing 
as an inducement, they said. For example, Higher One recently stated 
that it discontinued revenue-sharing incentives to new customers in 
November 2007 and has sought to terminate such provisions in existing 
agreements. As of March 2013, about 5 percent of Higher One's card 
contracts with schools contained revenue-sharing provisions, which in 
2012 paid an average of $12,000 per school, the company said. 

College Card Agreements Are Not Fully Transparent: 

Comprehensive information about the terms of agreements between 
college card providers and schools was not available. Neither 
Education nor CFPB collects all college card contracts.[Footnote 52] 
Some providers with which we spoke noted that they consider the 
contracts with schools to be proprietary or confidential, but in some 
cases the card issuers provided us with "template," or generic, 
contracts that omitted the terms specific to an individual school. 
Among the nine schools we reviewed, five provided us with copies of 
their contracts. 

According to Education staff, the agency currently has the authority 
to require schools to provide it with card contracts, although to date 
Education has not issued a broad request for such contracts. However, 
Education staff said it is uncertain whether the agency has the 
authority to publicly release any contracts it might collect. In 
addition, it is unclear whether Education has the authority to request 
schools' contracts in cases where the card provider does not 
administer financial aid payments, which is the case at three of the 
large schools included in our review, as well as at many other schools 
with college card agreements.[Footnote 53] Education staff said the 
agency also lacks authority to request additional information on 
actual college card costs incurred by students, which could be 
beneficial to both students and regulators. As noted earlier, 
Education currently encourages schools to disclose this information, 
but none of the nine schools included in our review provided this 
information to students. Similarly, in December 2013, CFPB issued an 
announcement calling for voluntary public disclosure by financial 
institutions of their college card agreements and other products 
marketed to students. The agency noted that students and their 
families should know if schools have a financial incentive to 
encourage students to use a specific account or card product.[Footnote 
54] 

In prior reports, we have cited the value of transparency in such 
areas as improving program outcomes and strengthening oversight. 
[Footnote 55] NACUBO's best practices recommendations call for greater 
transparency of college card agreements, stating that schools should 
publicly disclose the terms of any agreements with third parties 
issuing college cards to students. Some members of Congress also have 
cited the need for disclosure of college card contracts, saying, among 
other things, that transparency is needed to ensure that terms are 
fair and reasonable for students and the agreements are free from 
conflicts of interest or improper incentives. 

Disclosure is required for agreements for another college-related 
financial product--affinity credit cards--and for student loans and 
lenders. Affinity credit cards typically bear the name or logo of the 
school or organization and, in return, the card provider pays a 
portion of the proceeds of the credit card back to the organization. 
The Credit CARD Act, together with implementing regulations, 
establishes requirements for disclosure to federal authorities of the 
contracts between these card providers and school-related entities, 
plus other key information, such as payments from providers.[Footnote 
56] Under the act, the Federal Reserve (initially) and CFPB (most 
recently) have produced reports that summarize the disclosure 
information and make it readily accessible. CFPB maintains a public 
database containing the affinity credit card agreements.[Footnote 57] 

For student loans, disclosure requirements were enacted in 2008 after 
lenders were found to be improperly offering schools inducements to be 
placed on "preferred lender" lists. To help ensure that schools list 
lenders that offer the best terms and conditions for students, schools 
that maintain a list of preferred lenders must disclose the criteria 
used to select the lenders and the loan terms and conditions, as well 
as notify students that they need not borrow from a lender on the 
list.[Footnote 58] Similar disclosure of college card agreements could 
allow interested parties to review contract provisions and determine 
whether the agreements pose any concerns related to incentives or 
conflicts of interest. 

Federal Agencies Have Been Reviewing and Considering Further 
Regulation of College Cards: 

Education has been considering further regulation to address concerns 
about college cards. After holding public hearings in 2012 and 2013, 
Education announced in November 2013 that it was forming a committee 
to develop proposed regulations on a variety of federal student aid 
issues, including college cards. The committee is scheduled to begin 
work in February 2014. 

CFPB issued a Request for Information in February 2013 for topics 
including the structure of college card agreements, the types of 
financial products and services offered to students, and students' 
experiences using these cards. CFPB received 162 comments from card 
providers, schools, advocacy groups, students, and others. In 
September 2013, CFPB hosted a forum on college cards, at which it 
presented initial findings from its information request and 
stakeholders presented their views on college cards. At the forum, the 
agency said continuing areas of interest included how schools can use 
their bargaining power to negotiate card terms that provide better 
deals for students than products available to the general public; how 
students can be better equipped to shop for services; obstacles 
schools face when seeking to adopt best practices on disclosure of 
card arrangements; and whether schools have established codes of 
conduct for employees who negotiate card agreements, such as those 
required for school employees who select preferred student lenders. 
CFPB staff told us they have no specific schedule or outcome planned 
for their college card work, including whether they will propose any 
regulations. 

Conclusions: 

College cards may confer benefits to schools and students, but they 
may not be the best option for all students. Financial markets 
function best when consumers are fully informed about financial 
products and how to choose among them, and NACUBO has recommended that 
schools present students with information about their college cards in 
a neutral fashion. However, the information presented at some schools 
appears biased toward encouraging students to choose the college card 
over other options, and Education's guidance does not address the 
responsibility of schools to provide objective and neutral information 
to students about their financial aid payment options. As a result, 
some students may not be getting information that enables them to 
adequately assess whether a college card best meets their individual 
needs and preferences and is the most cost-effective choice among all 
options for conducting financial transactions and receiving student 
aid. 

On another key issue--access to funds--Education's regulations require 
that college card providers offer "convenient access" to ATMs or a 
bank branch office where students can withdraw federal student aid 
without incurring cost, but the agency has not specified what 
constitutes this level of access. Because of the concerns about access 
to fee-free ATMs at schools with college cards, Education staff have 
acknowledged that further specifying convenient access may be 
beneficial. As part of its recently announced process for developing 
regulations on a range of federal student aid topics, including 
college cards, Education could consider more specific direction on 
what constitutes convenient access--possibly including objective 
measures--which could resolve ambiguity and help ensure that students 
at all schools with college cards would be able to readily access 
student aid funds at no cost. 

Although millions of students attend institutions that offer college 
cards, comprehensive information is unavailable on the prevalence of 
agreements between schools and card providers, the terms of those 
agreements, and the experience of students in using college cards. As 
a result, it is difficult for policymakers and regulators to fully 
understand and effectively monitor the growing college card market. 
With the Credit CARD Act, Congress required greater transparency for 
college affinity credit cards, but not for college debit and prepaid 
cards, which were less prevalent at the time. Requiring disclosure of 
college debit and prepaid card agreements and related information, as 
well as making that information easily available, would provide 
greater transparency about the financial relationships between schools 
and card providers, and could help students, policymakers, and 
regulators identify potential concerns about these arrangements. 

Matter for Congressional Consideration: 

To help ensure a comprehensive understanding of the agreements between 
colleges and debit and prepaid card providers, Congress should 
consider requiring that providers file these agreements with CFPB for 
public review, and provide other relevant information, such as 
payments between schools and the providers and fees charged to 
students, and that Education provide reasonably prominent notice of 
the availability of such information. 

Recommendations for Executive Action: 

To help ensure that students can make an objective choice about 
whether to use a college card selected by their schools and have free 
and convenient access to federal student aid funds, the Secretary of 
Education should take the following actions: 

* In consultation with CFPB, develop requirements that schools and 
college card providers present students with objective and neutral 
information on their options for receiving federal student aid 
payments. 

* Provide a specific definition for what constitutes convenient access 
to ATMs or branch offices of debit and prepaid card providers where 
students will not incur costs in making cash withdrawals of federal 
student aid. 

Agency Comments: 

We provided a draft of this report to the Department of Education, the 
Bureau of Consumer Financial Protection, and the Federal Deposit 
Insurance Corporation. Education and CFPB provided written comments, 
which are reproduced in appendixes V and VI. In its written comments, 
Education concurred with our recommendations to the agency. Education 
reiterated that, as part of its upcoming process to develop proposed 
regulations for federal student aid programs, it is convening a 
committee that will discuss, among other things, the meaning of 
"convenient access" and potential requirements for schools and card 
providers to present students with information on federal student aid 
payment options. In its written comments, CFPB concurred with our 
Matter for Congressional Consideration, noting that the failure to 
disclose the nature of college card agreements raises potential 
consumer protection risks. CFPB also said that it will continue to 
monitor the college card market closely and take action as appropriate 
to ensure the law is being followed. Education, CFPB, and FDIC 
provided technical comments that were incorporated, as appropriate. We 
also provided selected relevant portions of the draft to other federal 
agencies mentioned in the report, as well as Higher One, and 
incorporated their technical comments as appropriate. 

We are sending copies of this report to other interested congressional 
committees, the Secretary of Education, the Director of the Bureau of 
Consumer Financial Protection, the Chairman of the Federal Deposit 
Insurance Corporation, and other interested parties. In addition, the 
report is available at no charge on the GAO website at [hyperlink, 
http://www.gao.gov]. 

If you or your staff have any questions about this report, please 
contact Alicia Puente Cackley at (202) 512-8678 or cackleya@gao.gov, 
or Melissa Emrey-Arras at (617) 788-0534 or emreyarrasm@gao.gov. 
Contact points for our Offices of Congressional Relations and Public 
Affairs may be found on the last page of this report. GAO staff who 
made key contributions to this report are listed in appendix VII. 

Sincerely yours, 

Signed by: 

Alicia Puente Cackley: 
Director, Financial Markets and Community Investment: 

Signed by: 

Melissa Emrey-Arras: 
Director, Education, Workforce, and Income Security: 

[End of section] 

Appendix I: Objectives, Scope, and Methodology: 

This report examines (1) functions of college cards and the 
characteristics of schools and card providers offering the cards, and 
(2) benefits and concerns regarding these cards. We focused on debit 
and prepaid cards provided to students through agreements between 
schools and banks or other financial firms. Our review did not include 
other card arrangements, such as "closed loop" systems, in which cards 
connected to predeposited funds typically can be used for payments on-
campus, or on-campus and at a limited number of near-campus merchants. 

Federal Agencies, Laws, and Regulations: 

We reviewed relevant federal laws and regulations, as well as 
documentation and guidance from federal agencies including the 
Department of Education (Education), the Bureau of Consumer Financial 
Protection (CFPB), the Federal Deposit Insurance Corporation (FDIC), 
and the Board of Governors of the Federal Reserve System (Federal 
Reserve). We interviewed staff from these agencies on topics that 
included their monitoring of college card activity and recent 
regulatory actions and initiatives. We reviewed public comments 
related to college cards that Education received during recent 
hearings held as part of a rulemaking process, and that CFPB received 
through a public Request for Information. We also reviewed debit card 
complaints submitted to Education and information on an FDIC 
enforcement action involving a college card provider. We attended, and 
reviewed material provided at, a CFPB forum on financial products 
marketed to college students. In addition, we reviewed documentation 
from, and interviewed staff of, other federal programs that distribute 
benefits electronically on cards--the Departments of Labor, 
Agriculture, Health and Human Services, and the Treasury. 

Data Analysis: 

To characterize the extent to which colleges and universities have 
entered into college card agreements, and to examine the financial 
services available through these cards, we developed a list of schools 
with agreements. We created this list by reviewing available data from 
sources including industry reports, interviews with college card 
providers, and information obtained from school and provider websites. 
[Footnote 59] Our creation and analysis of this information took place 
over several months leading up to and including July 2013. Although we 
conducted an extensive search, we may not have identified all schools 
with agreements. 

Using data from Education's Integrated Postsecondary Education Data 
System (IPEDS), we analyzed the institutional and student 
characteristics of schools we identified as having college card 
agreements, and compared these characteristics with those for schools 
and students overall. IPEDS is a system of interrelated surveys 
conducted annually to gather information from each college, 
university, and technical or vocational institution that participates 
in federal student aid programs.[Footnote 60] We used IPEDS data for 
the 2011-2012 school year, the most recent available, to report on the 
following school characteristics: school sector, location, enrollment, 
level of institution (such as 2-or 4-year), and percentage of students 
receiving Pell Grants. We also used the IPEDS data to report on the 
following student characteristics: age, race, and average amounts of 
financial aid received. 

To link the list of schools we identified as having card agreements to 
corresponding school and student characteristic data in IPEDS, we 
first used an automated process to match school names with IPEDS 
institution names. Most names matched successfully, but for the 
relatively few cases that did not, we made the match manually. Four 
schools from our college card agreement list did not match with IPEDS 
school names through either the automated or manual process. We 
excluded these schools from our analysis of student characteristics. 

Schools may have more than one unit or location. If IPEDS listed each 
of a college's locations or campuses separately, we counted each as a 
separate school. However, if we identified only a specific campus 
within a particular college system as having a card agreement, and not 
other campuses in the system, we included only the specific campus. 
Additionally, for schools offering online instruction, if IPEDS 
identified them separately, we also counted them separately in our 
analysis. 

We assessed the reliability of the IPEDS data by reviewing 
documentation about the systems used to produce the data and 
considering our previous use of the data. Based on our assessment, we 
concluded that IPEDS data were sufficiently reliable for our reporting 
purposes. 

Selection of Schools for Extended Review: 

To complement our data analysis, we selected nine schools with college 
card agreements for extended interviews and data collection. We 
selected this nongeneralizable sample of schools to include a mix of 
card types (debit and prepaid cards) and functions (such as use as 
identification card or for student payments). We selected schools with 
larger enrollments and higher proportions of students receiving 
federal student loans in order to focus on schools distributing larger 
amounts of federal student aid. We also included a mix of program 
lengths (for example, 4-year and 2-year), school sectors (public, 
nonprofit, and for-profit), card providers, and geographic locations. 
We interviewed officials at each of the selected schools and reviewed 
key documents including, where available, contracts with college card 
providers, card terms and conditions, and online and paper materials 
provided to students. We also interviewed student leaders at five of 
these schools where we could arrange meetings with students. (Table 3 
summarizes the characteristics of the institutions we selected and the 
types of cards and card services they offer.) Our interviews covered 
topics including college card features, how and why schools decided to 
enter into card agreements, contract terms, card fees, and agreement 
benefits and concerns. 

Table 3: Institutions Selected for Extended Review, by Card Type and 
Services Offered: 

School sector and program length: Public; 4-year; 
Enrollment and location: 46,000 students; East; 
Type of card: 
Debit: [Check]; 
Prepaid: [Empty]; 
Provider-issued card serves as student ID: [Empty]; 
Services offered: 
School-issued student ID linked to checking: [Check]; 
Payment of financial aid and other funds: [Empty]. 

School sector and program length: Public; 4-year; 
Type of card: Enrollment and location: 15,000 students; West; 
Type of card: 
Debit: [Check]; 
Prepaid: [Empty]; 
Provider-issued card serves as student ID: [Empty]; 
Services offered: 
School-issued student ID linked to checking: [Empty]; 
Payment of financial aid and other funds: [Check]. 

School sector and program length: Public; 4-year; 
Type of card: Enrollment and location: 31,000 students; East; 
Type of card: 
Debit: [Check]; 
Prepaid: [Empty]; 
Provider-issued card serves as student ID: [Empty]; 
Services offered: 
School-issued student ID linked to checking: [Check]; 
Payment of financial aid and other funds: [Empty]. 

School sector and program length: Public; 2-year; 
Type of card: Enrollment and location: 18,000 students; Midwest; 
Type of card: 
Debit: [Check]; 
Prepaid: [Empty]; 
Provider-issued card serves as student ID: [Empty]; 
Services offered: 
School-issued student ID linked to checking: [Check]; 
Payment of financial aid and other funds: [Empty]. 

School sector and program length: Public; 2-year; 
Type of card: Enrollment and location: 24,000 students; Midwest; 
Type of card: 
Debit: [Check]; 
Prepaid: [Empty]; 
Provider-issued card serves as student ID: [Check]; 
Services offered: 
School-issued student ID linked to checking: [Empty]; 
Payment of financial aid and other funds: [Check]. 

School sector and program length: Public; 2-year; 
Type of card: Enrollment and location: 25,000 students; West; 
Type of card: 
Debit: [Empty]; 
Prepaid: [Check]; 
Provider-issued card serves as student ID: [Empty]; 
Services offered: 
School-issued student ID linked to checking: [Empty]; 
Payment of financial aid and other funds: [Check]. 

School sector and program length: Private, nonprofit; 4-year; 
Type of card: Enrollment and location: 74,000 students; East; 
Type of card: 
Debit: [Check]; 
Prepaid: [Empty]; 
Provider-issued card serves as student ID: [Empty]; 
Services offered: 
School-issued student ID linked to checking: [Empty]; 
Payment of financial aid and other funds: [Check]. 

School sector and program length: Private, nonprofit; 4-year; 
Type of card: Enrollment and location: 5,000 students; East; 
Type of card: 
Debit: [Empty]; 
Prepaid: [Check]; 
Provider-issued card serves as student ID: [Empty]; 
Services offered: 
School-issued student ID linked to checking: [Empty]; 
Payment of financial aid and other funds: [Check]. 

School sector and program length: Private, for-profit; 4-year; 
Type of card: Enrollment and location: 23,000 students; West; 
Type of card: 
Debit: [Check]; 
Prepaid: [Empty]; 
Provider-issued card serves as student ID: [Empty]; 
Services offered: 
School-issued student ID linked to checking: [Empty]; 
Payment of financial aid and other funds: [Check]. 

Sources: U.S. Department of Education, school officials. 

[End of table] 

College Card Providers and Fees: 

We interviewed executives of eight banks and financial firms that were 
the largest providers of college cards, together accounting for about 
90 percent of the college card agreements we identified. The eight 
companies were Higher One, Inc.; U.S. Bank; Sallie Mae, Inc.; PNC 
Bank; Wells Fargo Bank; Citibank; Heartland Payment Systems, Inc.; and 
Blackboard, Inc. We reviewed documents obtained from the providers, 
including samples of contracts with schools and marketing materials. 
We also reviewed securities filings, fee schedules, and other publicly 
available information for the eight providers. To compare college card 
fees with fees for similar banking services, we also compiled fee 
information for basic and student checking accounts from five large 
banks (which account for about 30 percent of the market for large 
commercial banks) and for credit unions.[Footnote 61] We reviewed 
these providers' fees for monthly account maintenance, domestic out-of-
network transactions at automated teller machines (ATM), overdraft or 
insufficient funds, inactivity, wire transfer, and debit transactions 
using personal identification numbers (PIN). We selected the five 
large banks based on consolidated assets as of June 30, 2013, as 
reported by the Federal Reserve. (The banks we selected were not among 
the eight largest college card providers we identified.) We obtained 
these banks' fee information in August and September 2013 from 
information available on providers' websites, and when such 
information was not sufficient, by calling the provider's customer 
service line. We designated a bank's checking accounts as basic if 
they provided standard services such as check-writing, debit cards, 
and access to a bank branch. For credit union fee information, we 
reviewed fees reported in the Credit Union National Association's 2013-
2014 Fees Report. 

Industry Groups, Consumer Associations, and Other Sources: 

We also obtained information from other relevant parties. This 
included interviews with representatives from industry groups, 
including the American Bankers Association, the Consumer Bankers 
Association, and the Credit Union National Association; consumer 
advocacy organizations, including the National Consumer Law Center and 
the U.S. Public Interest Research Group; higher education 
associations, including the American Student Government Association, 
National Association of Campus Card Users, and National Association of 
College and University Business Officers; two schools that had 
canceled their college card programs (in addition to the nine schools 
selected for extended review); and four financial services providers, 
including Visa and MasterCard, that submitted public comments to CFPB 
regarding college cards (in addition to the eight largest providers). 
We reviewed documents, reports, and other information from these 
groups, as available. 

We conducted this performance audit from November 2012 to February 
2014 in accordance with generally accepted government auditing 
standards. Those standards require that we plan and perform the audit 
to obtain sufficient, appropriate evidence to provide a reasonable 
basis for our findings and conclusions based on our audit objectives. 
We believe that the evidence obtained provides a reasonable basis for 
our findings and conclusions based on our audit objectives. 

[End of section] 

Appendix II: Comparison of Student Payments by College Cards with 
Other Federal Benefits Distributed by Prepaid or Electronic Benefit 
Cards: 

We reviewed several federal programs that use prepaid or electronic 
benefit cards to provide payments to beneficiaries (see table 4). 
Although there are some similarities, these card programs generally 
differ from the debit and prepaid cards that some U.S. colleges and 
universities use to pay financial aid and other funds, which can 
include federal student aid funds. Key points of comparison include: 

* Administrative structure. The other federal programs we reviewed 
that use prepaid and electronic cards, some of which are run through 
partnerships with state governments, generally distribute aid directly 
to beneficiaries on prepaid and electronic benefit cards that are 
provided through centrally managed agreements between the federal or 
state governments and card providers. In contrast, federal student aid 
is channeled through individual schools, and these schools negotiate 
individual agreements with card providers. 

* Scale. Schools with college card programs have student populations 
ranging from less than 1,000 to more than 100,000 students. However, 
other federal programs can be much larger. For example, the Department 
of Agriculture's Supplemental Nutrition Assistance Program (SNAP), 
formerly known as the Food Stamp Program, had more than 46 million 
participants in 2012. 

* Choice of how to receive benefits. The Department of Education 
(Education) prohibits schools from requiring that students use college 
cards, and funds can be paid to students by paper check; electronic 
transfer of funds, such as to a college card or direct deposit to an 
existing account; or in cash. The Department of the Treasury provides 
Social Security beneficiaries with a choice of receiving benefits by 
direct deposit or on a prepaid card, though generally not by paper 
check. For other federal programs, like the Department of Health and 
Human Services' Temporary Assistance for Needy Families program, 
electronic benefit transfer (EBT) cards are the only way beneficiaries 
can obtain their benefits in most states. 

* Card limitations. Education requires that the federal student aid 
funds students receive on college cards be convertible to cash that 
can be used for any purpose. The Department of Labor (Labor) has 
similar requirements for funds provided through Unemployment Insurance 
benefit cards. However, other federal programs may limit where and for 
what items benefit cards can be used. For example, SNAP limits EBT 
card purchases to eligible food items from approved retailers. 

* Card fees. Similar to Education, other federal agencies we reviewed 
place some limits on card user fees. Each of the programs described 
below requires that card users have at least one opportunity to obtain 
benefits without a fee. SNAP prohibits all card user fees, although 
states may charge a fee for replacement cards. 

Table 4: Description of Selected Federal Program Benefits Issued on 
Prepaid or EBT Cards: 

Agency/program: Department of Agriculture; 
* Supplemental Nutrition Assistance Program (SNAP); 
* Special Supplemental Nutrition Program for Women, Infants, and 
Children (WIC); 
Administrative structure and benefit options: SNAP and WIC provide 
nutrition assistance to low-income individuals and families, and to 
pregnant and postpartum women, infants, and children, respectively. 
All states issue SNAP benefits solely through EBT cards, and six 
states currently issue WIC benefits by EBT statewide. Each state 
selects its own EBT card provider. However, the Department of 
Agriculture reviews states' requests for proposals to ensure contracts 
meet requirements and are awarded through competitive processes. 
Card usage and limitations: SNAP EBT cards can be used only to buy 
eligible food items from approved retailers, and WIC EBT card 
purchases are limited to designated packages of food. SNAP and WIC 
benefits cannot be accessed through automated teller machines (ATM)[A]; 
Card fees: Federal law prohibits card fees for beneficiaries, except 
for a replacement card fee charged by some states. 

Agency/program: Department of Health and Human Services[B]; Temporary 
Assistance for Needy Families (TANF); 
Administrative structure and benefit options: TANF provides cash 
assistance to low-income families. Each state is responsible for 
administering its own payment methods and selecting an EBT card 
provider, if it chooses. Although some states allow recipients to 
choose among payment methods (EBT card, paper check), EBT cards are 
the only option in the majority of states. 
Card usage and limitations: TANF EBT cards can be used to make 
purchases at retailers or withdraw cash at ATMs or banks, but federal 
and state rules restrict transactions at certain locations, such as 
liquor stores and casinos[C]; 
Card fees: Recipients must have access to benefits with minimal fees 
or charges, including an opportunity to access benefits with no fee or 
charges. 

Agency/program: Department of the Treasury; Direct Express card for 
Social Security, Supplemental Security Income, and other federal 
benefit programs; 
Administrative structure and benefit options: Federal regulations 
require federal benefit payments to be made electronically. 
Beneficiaries can choose between direct deposit into personal bank 
accounts or the Direct Express prepaid card issued by Comerica Bank. 
Card usage and limitations: Direct Express cards can be used to make 
purchases and get cash from ATMs or bank locations nationwide that 
accept MasterCard. No restrictions on purchases. 
Card fees: No monthly account fees or fees on domestic purchases 
(including cash back with purchases) or bank withdrawals. Customers 
receive one free withdrawal from a network ATM with each benefit 
deposit onto the card, but are charged $0.90 for each additional 
withdrawal. 

Agency/program: Department of Labor; Unemployment Insurance; 
Administrative structure and benefit options: Unemployment Insurance 
benefits are provided to eligible workers who become unemployed 
through no fault of their own. Benefits are administered by individual 
states, which determine their distribution methods. More than 40 
states currently issue benefits on cards. 
Card usage and limitations: Cards can be used to make purchases and 
get cash from ATMs or bank locations. No restrictions on purchases. 
Card fees: Beneficiaries must have at least one opportunity to access 
the full amount of the weekly or biweekly benefit for free. Other fees 
are determined through negotiations between individual states and card 
providers. In general, states and card providers allow unlimited free 
in-network ATM withdrawals, with limited free out-of-network ATM 
withdrawals. ATM fees range from $0.40 to $2.50 depending on the state 
and whether the ATM is in the provider's network. 

Source: GAO analysis of agency interviews and documents. 

[A] For additional information on SNAP EBT cards, see GAO, 
Supplemental Nutrition Assistance Program: Payment Errors and 
Trafficking Have Declined, but Challenges Remain, GAO-10-956T 
(Washington, D.C.: July 28, 2010). 

[B] The Department of Health and Human Services also administers the 
Child Care Development Fund program. Most payments for this program 
are made by states directly to child care providers. However, two 
states (Kansas and Utah) currently distribute payments to parents 
using EBT cards. In these cases, parents use the EBT cards to pay 
their child care providers directly. Because the bulk of states do not 
have this EBT card arrangement, we omit the program from the table. 

[C] Federal law prohibits TANF assistance from being accessed via any 
EBT transaction in liquor stores, casinos or gaming establishments, 
and any establishment which provides adult-oriented entertainment in 
which performers disrobe or perform in an unclothed state for 
entertainment. Middle Class Tax Relief and Job Creation Act of 2012, 
Pub. L. No. 112-96, § 4004, 126 Stat. 156, 197-198 (codified at 42 
U.S.C. § 608(a)(12)). For more information, see GAO, TANF Electronic 
Benefit Cards: Some States Are Restricting Certain TANF Transactions, 
but Challenges Remain, GAO-12-535 (Washington, D.C.: July 20, 2012). 

[End of table] 

Among the federal programs we reviewed, the one most similar to 
college cards was Labor's electronic distribution of Unemployment 
Insurance benefits. In both cases, beneficiaries have no limits on 
purchases using the card and generally have a choice in how they 
receive their benefits. While neither Labor nor Education negotiates 
contracts with card providers, both agencies impose requirements aimed 
at ensuring that agreements have protections for beneficiaries. For 
example, both require that beneficiaries have an opportunity to access 
their full benefit without incurring a fee. Labor staff told us they 
have been developing new guidance that will likely encourage states to 
negotiate card agreements that minimize fees and offer beneficiaries a 
choice in how they receive benefits. They said they may issue the 
guidance early in 2014. 

[End of section] 

Appendix III: Comparison of College Card Fees among Providers, Other 
Institutions, and Account Types: 

To examine the costs of college card accounts, we obtained publicly 
available fee information for college card providers on selected items 
or transactions as of August and September 2013. We also obtained 
publicly available fee information for products similar to college 
cards--basic and student checking accounts--offered by other financial 
institutions. 

College Cards: 

Table 5: Fees for College Cards, by College Card Provider and Type, as 
of August-September 2013: 

Higher One: OneAccount; 
Card type: Debit; 
Monthly maintenance fee: $0[C]; 
ATM out-of-network fee (domestic)[A]: $2.50; 
Insufficient funds/overdraft fee: $29[D]; 
Wire transfer fee[B]: $25 outgoing; 
Monthly inactivity fee: $0; 
PIN-based debit transaction fee: $0.50. 

Higher One: OneAccount Edge; 
Card type: Debit; 
Monthly maintenance fee: $4.95; 
ATM out-of-network fee (domestic)[A]: $0; 
Insufficient funds/overdraft fee: $0; 
Wire transfer fee[B]: Not applicable[E]; 
Monthly inactivity fee: 0; 
PIN-based debit transaction fee: $0. 

Higher One: OneAccount Premier; 
Card type: Debit; 
Monthly maintenance fee: $5.95[F]; 
ATM out-of-network fee (domestic)[A]: $2.50[G]; 
Insufficient funds/overdraft fee: $29[D]; 
Wire transfer fee[B]: $25 outgoing; 
Monthly inactivity fee: $0; 
PIN-based debit transaction fee: $0. 

U.S. Bank; 
Card type: Debit[H]; 
Monthly maintenance fee: $0; 
ATM out-of-network fee (domestic)[A]: $2.50; 
Insufficient funds/overdraft fee: $36[I]; 
Wire transfer fee[B]: $20 incoming, $30 outgoing; 
Monthly inactivity fee: $0; 
PIN-based debit transaction fee: $0. 

U.S. Bank; 
Card type: Prepaid; 
Monthly maintenance fee: $0; 
ATM out-of-network fee (domestic)[A]: $2; 
Insufficient funds/overdraft fee: Not applicable; 
Wire transfer fee[B]: $0; 
Monthly inactivity fee: $2 (after 9 months of inactivity); 
PIN-based debit transaction fee: $0. 

Blackboard; 
Card type: Prepaid; 
Monthly maintenance fee: $0; 
ATM out-of-network fee (domestic)[A]: $2.50; 
Insufficient funds/overdraft fee: Not applicable; 
Wire transfer fee[B]: Not applicable; 
Monthly inactivity fee: $3.50 (after 24 months of inactivity); 
PIN-based debit transaction fee: $0. 

Heartland Payment Systems; 
Card type: Prepaid; 
Monthly maintenance fee: $0; 
ATM out-of-network fee (domestic)[A]: $2; 
Insufficient funds/overdraft fee: Not applicable; 
Wire transfer fee[B]: $0; 
Monthly inactivity fee: $5 (after 24 months of inactivity); 
PIN-based debit transaction fee: $0. 

PNC; 
Card type: Prepaid; 
Monthly maintenance fee: $5; 
ATM out-of-network fee (domestic)[A]: $2.50; 
Insufficient funds/overdraft fee: $0; 
Wire transfer fee[B]: $15 incoming, $25 outgoing; 
Monthly inactivity fee: $0; 
PIN-based debit transaction fee: $0. 

PNC; 
Card type: Debit; 
Monthly maintenance fee: $0[J]; 
ATM out-of-network fee (domestic)[A]: $2.50; 
Insufficient funds/overdraft fee: $36[K]; 
Wire transfer fee[B]: $15 incoming, $25 outgoing[L]; 
Monthly inactivity fee: $15 (after 6 months of inactivity); 
PIN-based debit transaction fee: $0. 

Wells Fargo; 
Card type: Debit; 
Monthly maintenance fee: $0; 
ATM out-of-network fee (domestic)[A]: $2.50; 
Insufficient funds/overdraft fee: $0[M]; 
Wire transfer fee[B]: $15 incoming, $30 outgoing; 
Monthly inactivity fee: $0; 
PIN-based debit transaction fee: $0. 

Sallie Mae[N]; 
Card type: Prepaid; 
Monthly maintenance fee: $4.95[O]; 
ATM out-of-network fee (domestic)[A]: $2.50; 
Insufficient funds/overdraft fee: $0; 
Wire transfer fee[B]: Not applicable[P]; 
Monthly inactivity fee: Not listed; 
PIN-based debit transaction fee: Not listed. 

Citibank; 
Card type: Prepaid; 
Monthly maintenance fee: $0; 
ATM out-of-network fee (domestic)[A]: $3; 
Insufficient funds/overdraft fee: Not applicable; 
Wire transfer fee[B]: Not listed; 
Monthly inactivity fee: $3 (after 12 months of inactivity)[Q]; 
PIN-based debit transaction fee: $0.50[R]. 

Source: GAO analysis of publicly available fee schedules and provider 
information. 

Note: Fees shown as "Not applicable" were listed as such in account 
materials or as described by providers. 

[A] Students also may incur fees from the ATM owner. All out-of-
network ATM fees are for domestic withdrawals. 

[B] The fees are for domestic wire transfers. Some providers also 
offer alternative, potentially less expensive options for transferring 
money to another account, such as depositing paper checks. 

[C] Nonstudent accountholders are charged $3.95, which is waived with 
$100 in direct deposit per month. 

[D] Higher One will not authorize ATM withdrawals or everyday one-time 
or recurring debit card purchases when the accountholder does not have 
sufficient funds in the account to cover the withdrawal or purchase. 
Student would be charged $29 for first item and $38 for any subsequent 
item. Higher One does not provide overdraft protection for its 
checking accounts. 

[E] OneAccount Edge accountholders cannot perform wire transfers. 

[F] The fee is waived with $300 in direct deposits each month. 

[G] OneAccount Premier accountholders receive one monthly non-Higher 
One ATM withdrawal fee reimbursement. 

[H] According to U.S. Bank, its debit cards can be attached to any one 
of U.S. Bank's checking accounts, each with different options and 
fees. Fees shown here apply to the U.S Bank Student Checking account, 
which the bank said is the most popular account chosen by students. 

[I] No fee is charged for items of $5 or less. A $36 fee is charged 
for items more than $5. 

[J] No monthly service charge if the customer provides proof of active 
enrollment in qualifying educational institution (expires 6 years 
after account is enrolled in student banking program). 

[K] According to PNC, overdraft fees are waived for the first 
overdraft. 

[L] Customers in the Student Banking program enrolled at a designated 
PNC Alliance or Access school continue to receive one free domestic or 
international incoming wire transfer per statement period. 

[M] If an accountholder adds Debit Card Overdraft Service and an ATM 
or everyday debit card transaction overdraws the account, a $35 fee 
will be charged per item. If the accountholder does not add the 
service, the ATM or everyday debit card transaction will be declined 
and no overdraft fee will be charged. 

[N] Higher One acquired Sallie Mae's student card operations in 2013. 

[O] The charge is waived in any monthly billing cycle when the 
customer receives a payment, posts 15 qualifying purchase 
transactions, or loads at least $1,000 on the card. 

[P] Sallie Mae's prepaid card did not accept wired funds. 

[Q] Following a 12-month grace period; an inactive account is defined 
as any account that has not received a payment or completed a 
withdrawal transaction within 90 days. 

[R] The first PIN transaction fee is waived per each deposit to the 
card account. 

[End of table] 

Other Financial Institutions: 

Table 6: Fees for Other Banking Products Available to Students, by 
Provider and Type, as of August-September 2013: 

JP Morgan Chase; 
Account type: Basic; 
Monthly maintenance fee: $12[A]; 
ATM out-of-network fee (domestic): $2; 
Insufficient funds/overdraft fee: $34; 
Domestic wire transfer fee: $15 incoming, $30 outgoing[B]; 
Inactivity fee: $0; 
PIN-based debit transaction fee: $0. 

JP Morgan Chase; 
Account type: Student[C]; 
Monthly maintenance fee: $6[D]; 
ATM out-of-network fee (domestic): $2; 
Insufficient funds/overdraft fee: $34; 
Domestic wire transfer fee: $15 incoming, $30 outgoing[E]; 
Inactivity fee: $0; 
PIN-based debit transaction fee: $0. 

Bank of America; 
Account type: Basic; 
Monthly maintenance fee: $12[F]; 
ATM out-of-network fee (domestic): $2; 
Insufficient funds/overdraft fee: $35[G]; 
Domestic wire transfer fee: $12 incoming, $25 outgoing; 
Inactivity fee: $0; 
PIN-based debit transaction fee: $0. 

Bank of America; 
Account type: Student; 
Monthly maintenance fee: $0[H]; 
ATM out-of-network fee (domestic): $2; 
Insufficient funds/overdraft fee: $35[G]; 
Domestic wire transfer fee: $12 incoming, $25 outgoing; 
Inactivity fee: $0; 
PIN-based debit transaction fee: $0. 

Capital One Bank; 
Account type: Basic; 
Monthly maintenance fee: $8.95[I]; 
ATM out-of-network fee (domestic): $2; 
Insufficient funds/overdraft fee: $35; 
Domestic wire transfer fee: $15 incoming, $25 outgoing; 
Inactivity fee: $0; 
PIN-based debit transaction fee: $0. 

Capital One Bank; 
Account type: Student; 
Monthly maintenance fee: $0; 
ATM out-of-network fee (domestic): $2; 
Insufficient funds/overdraft fee: $35; 
Domestic wire transfer fee: $15 incoming, $25 outgoing; 
Inactivity fee: $0; 
PIN-based debit transaction fee: $0. 

TD Bank; 
Account type: Basic; 
Monthly maintenance fee: $5.99[J]; 
ATM out-of-network fee (domestic): $2.50; 
Insufficient funds/overdraft fee: $35; 
Domestic wire transfer fee: $15 incoming, $25 outgoing; 
Inactivity fee: $0; 
PIN-based debit transaction fee: $0. 

TD Bank; 
Account type: Student; 
Monthly maintenance fee: $0; 
ATM out-of-network fee (domestic): $2.50; 
Insufficient funds/overdraft fee: $0[K]; 
Domestic wire transfer fee: $15 incoming, $25 outgoing; 
Inactivity fee: $0; 
PIN-based debit transaction fee: $0. 

BB&T; 
Account type: Basic; 
Monthly maintenance fee: $10[L]; 
ATM out-of-network fee (domestic): $2.50; 
Insufficient funds/overdraft fee: $0[M]; 
Domestic wire transfer fee: $15 incoming, $24 outgoing; 
Inactivity fee: $0; 
PIN-based debit transaction fee: $0. 

BB&T; 
Account type: Student; 
Monthly maintenance fee: $0; 
ATM out-of-network fee (domestic): $2.50[N]; 
Insufficient funds/overdraft fee: $0[M]; 
Domestic wire transfer fee: $15 incoming, $24 outgoing; 
Inactivity fee: $0; 
PIN-based debit transaction fee: $0. 

Credit unions (median fees)[O]; 
Monthly maintenance fee: $0; 
ATM out-of-network fee (domestic): $1; 
Insufficient funds/overdraft fee: $25 insufficient funds fee, $4 
overdraft fee; 
Domestic wire transfer fee: $15 outgoing, $10 incoming[P]; 
Inactivity fee: Not available; 
PIN-based debit transaction fee: $0. 

Community banks: Comprehensive information not available. 

Source: GAO analysis of publicly available fee schedules and provider 
information. 

[A] The fee is $10 in California, Oregon, and Washington. The monthly 
service charge can be avoided if the customer does any one of the 
following each monthly statement period: makes direct deposits 
totaling $500 or more into the account monthly; maintains $1,500 
minimum daily balance; maintains average daily balance of $5,000 or 
more in any combination of qualifying linked deposits or investments; 
or pays $25 or more in qualifying checking-related services or fees. 

[B] The domestic outgoing charge is $25 if a transfer is made through 
chase.com. 

[C] The account is for college students age 17-24 when proof of 
student status is provided. 

[D] No monthly maintenance fee is charged if the customer has done one 
of the following: enrolled in college (up to 5 years); made a direct 
deposit to the account monthly; or maintained a $5,000 monthly average 
daily balance. 

[E] The domestic outgoing charge is $25 if the transfer is made 
through chase.com. 

[F] The fee is waived if the customer does one of the following each 
statement period: makes at least one direct deposit of $250, or 
maintains an average daily balance of $1,500 or more. 

[G] Bank of America will not authorize ATM withdrawals or everyday 
debit card purchases when the customer does not have sufficient funds 
in the account. A fee is assessed for scheduled payments and checks. 

[H] A $12 monthly maintenance fee is charged if the accountholder is 
not enrolled in school or under age 23. 

[I] The fee is waived with a $300 minimum daily balance or single 
monthly direct deposit of $250 or more. 

[J] The fee is $4.95 when customer chooses online statements only. 

[K] If the accountholder adds overdraft service, a $35 fee is charged 
per ATM or debit card transaction. If the accountholder does not add 
this service, the ATM or everyday debit card transaction will be 
declined and no overdraft fee charged. 

[L] The fee is waived with one automated direct deposit of $100 or 
greater per statement period; $1,500 average checking balance per 
statement period; or $6,000 in combined deposit or retail outstanding 
loan balances. 

[M] Accountholders can opt in to overdraft protection, which allows 
the bank to authorize transactions when the account has insufficient 
funds; they will be charged a fee. If accountholder does not opt in, 
the transaction will be declined and a fee assessed. 

[N] Student banking accountholders receive four no-fee non-BB&T 
transactions per statement period. 

[O] Based on survey responses from 1,000 credit unions. Median fee 
amounts are based on credit unions that charged a particular fee. When 
the majority of credit unions did not charge a specific fee, the 
median amount was reported as $0. See Credit Union National 
Association, Fees Report 2013-2014, conducted from November 2012 
through February 2013. 

[P] Data from Credit Union National Association 2010-2011 survey, 
because this data element was not included in the 2013-2014 survey. 

[End of table] 

[End of section] 

Appendix IV: Federal Provisions Addressing Debit and Prepaid Cards: 

A number of federal laws and regulations can apply to debit and 
prepaid cards. With the exception of education-specific items, these 
provisions apply generally to such cards, and do not specifically 
address college debit and prepaid cards. In general, debit cards have 
greater consumer protections than prepaid cards. Table 7 shows 
summaries of key provisions. 

Table 7: Federal Provisions Addressing Debit and Prepaid Cards: 

Law/regulation: Electronic Fund Transfer Act; 15 U.S.C. §§ 1693-1693r; 
Regulation E; 12 C.F.R. Part 1005; 
Debit cards: 
* Cardholder liability limited to $50 if cardholder notifies issuing 
financial institution within 2 business days after discovering the 
loss or theft of an access device. Notification after 2 business days 
may result in loss of up to $500 (or more, in certain circumstances); 
* Financial institutions must disclose fees associated with debit card 
and must issue statement for each monthly cycle in which a transaction 
occurred and at least quarterly if no transaction occurred; 
* Financial institutions must provide 21-day notice before altering 
fee schedule or liability limits for unauthorized transactions; 
* Cardholders must provide their financial institutions with written 
permission to allow institution to charge overdraft fee for one-time 
debit card or ATM transaction use while balance is negative ("opt in"); 
Prepaid cards[A]: 
* Regulation E generally does not apply, but Bureau of Consumer 
Financial Protection (CFPB) has issued an advance notice of proposed 
rulemaking as it considers whether to extend the regulation's 
protections to prepaid cards; 
* Cardholder liability not limited under federal law, although 
liability may be limited by contract; 
* No disclosure or periodic statement requirements under federal law; 
* No requirement that card issuers provide notice of fee changes. 
Prepaid cards also may have more fee types than debit cards; 
* Generally, cardholder cannot spend more than card's loaded value; 
* Credit CARD Act restrictions[B] on dormancy fees, service fees, or 
expiration dates apply only to gift cards, not to cards used more 
generally as replacements for checking or deposit accounts. 

Law/regulation: Family Educational Rights and Privacy Act (FERPA); 
20 U.S.C. § 1232g; 34 CFR Part 99; 
Debit cards: 
* Generally, institutions of postsecondary education must have written 
permission from students to release personally identifiable 
information from student's education record. However, FERPA allows 
disclosure of student records without prior consent to "school 
officials"--who can be outside parties contracted by the schools, such 
as debit card providers--with a legitimate educational interest, and 
to appropriate parties in connection with financial aid; 
* Schools may disclose without consent "directory information," such 
as a student's name, address, and date of birth; 
* Outside parties receiving student information must give the 
information the same protection as schools and can use it only for 
intended purpose; 
* FERPA does not apply until student begins attending the school; 
Prepaid cards[A]: Loading of card with personally identifiable 
information before student consents to the relationship is a violation 
of FERPA. 

Law/regulation: Federal deposit insurance; 
Debit cards: Underlying checking or deposit accounts to which debit 
cards are tied carry up to $250,000 in mandatory Federal Deposit 
Insurance Corporation (FDIC) insurance; 
Prepaid cards[A]: 
* Funds linked to prepaid card may or may not be insured. Cardholders 
may not be covered by deposit insurance if FDIC requirements for "pass-
through" insurance not met[C]; 
* Card issuers may choose whether to cover the product with FDIC 
insurance. Others may opt for coverage through state money transmitter 
licenses, which require a surety bond. 

Law/regulation: Expedited Funds Availability Act; 12 U.S.C. §§ 4001-
4010; Regulation CC; 12 CFR Part 229; 
Debit cards: Electronic payments must be made available on first 
business day following banking day of deposit ("next-day 
availability"). Transaction accountholders must receive disclosures on 
when funds will be available; 
Prepaid cards[A]: Generally, prepaid cards not subject to Regulation 
CC, but the provision could apply, depending on card features. 

Law/regulation: Regulation II (debit card interchange fees and 
routing); 12 C.F.R. Part 235; 
Debit cards: 
* Debit cards are subject to regulatory standards for assessing 
whether interchange fees received by debit card issuer for electronic 
debit transaction are reasonable and proportional to the costs 
incurred by issuer for the transaction; 
* Interchange fee standards do not apply to interchange fees charged 
or received by debit card issuer that has total assets of less than 
$10 billion (with affiliates) and holds the account being debited; 
Prepaid cards[A]: Certain prepaid cards are exempt from interchange 
fee limitations. If prepaid card is only means of accessing underlying 
funds (except when all remaining funds are provided to cardholder in 
single transaction), interchange fee standards do not apply. 

Law/regulation: Higher Education Act of 1965, as amended, Title IV; 
20 U.S.C. §§ 1070-1099d and 42 U.S.C. §§ 2751-2756b; 34 C.F.R. § 
668.164; 
Debit cards: 
* Regulations implementing Title IV permit payment of funds to student 
or parent bank account, defined as an account insured by FDIC or the 
National Credit Union Share Insurance Fund. The account may be one 
that "underlies a stored-value card or other transaction device"; 
* When a school opens a bank account on behalf of a student or assists 
a student in opening a bank account, the school must, among other 
things: obtain written consent from the student to open the account; 
inform the student of the terms of account prior to opening; ensure 
the student does not incur costs in opening account or receiving a 
debit or ATM card; and ensure the student has "convenient access" to 
ATM or branch of the bank; 
* When a school opens a bank account for a student, regulations 
prohibit the school from subsequently converting the account or card 
to a credit card or credit instrument; 
* Credit balances that remain after the school applies Title IV funds 
to pay tuition, fees, and room and board must be paid to the student 
as soon as possible but (1) no later than 14 days after balance 
occurred if the balance occurred after first day of class; or (2) no 
later than 14 days after first day of class of a payment period if 
balance occurred on or before first day of class of payment period. 

Law/regulation: Federal Trade Commission Act, Sec. 5; 15 U.S.C. § 45; 
Consumer Financial Protection Act of 2010 (CFPB authority regarding 
unfair, deceptive, or abusive acts or practices); 12 U.S.C. § 5531; 
Debit cards: 
* Section 5 of Federal Trade Commission Act (FTC Act) prohibits unfair 
or deceptive acts or practices; 
* The Federal Trade Commission (FTC) has FTC Act jurisdiction over 
financial products and services offered by entities other than banks, 
thrifts, federal credit unions, certain nonprofit organizations, and 
those specifically exempt from FTC jurisdiction; 
* The Office of the Comptroller of the Currency, Board of Governors of 
the Federal Reserve System, and FDIC have FTC Act jurisdiction for 
financial institutions they regulate; 
* The Dodd-Frank Wall Street Reform and Consumer Protection Act, which 
created CFPB, gives the agency enforcement authority over unfair, 
deceptive, or abusive acts or practices by covered persons or service 
providers[D]; 
* An act or practice may be unfair if it causes, or is likely to 
cause, "substantial injury" to consumers; is not reasonably avoidable; 
and any injury is not outweighed by benefits to consumers or 
competition; 
* Using FTC standard for deception, CFPB may find acts or practices 
deceptive if the representation, act, or practice is material and 
misleads or is likely to mislead a consumer, and the consumer's 
interpretation is reasonable under the circumstances; 
* CFPB may declare an act or practice "abusive" if (i) it "materially 
interferes" with a consumer's ability to understand terms of a 
financial product or (ii) if it takes unreasonable advantage of the 
consumer's (a) lack of understanding of the material risks, costs, or 
conditions of a product, (b) a consumer's inability to protect 
his/herself in selecting or using the financial product, or (c) 
consumer's reasonable reliance on a person to act in the interests of 
the consumer. 

Law/regulation: Regulation P (privacy provisions of Gramm-Leach-Bliley 
Act); 12 C.F.R. Part 1016; 
Debit cards: 
* Initial disclosure of a privacy policy must be made when customer 
relationship for purchase of financial product or service is 
established with an institution; 
* Financial institutions also must annually explain their data-sharing 
process and provide cardholders with an opportunity to opt out of 
certain information-sharing arrangements; 
* An institution of higher education that complies with FERPA and also 
is a financial institution subject to FTC's enforcement jurisdiction 
is deemed to be in compliance with Regulation P. 

Source: GAO review of laws and regulations. 

[A] We use "prepaid card" to mean general-purpose reloadable cards. 

[B] Credit Card Accountability Responsibility and Disclosure Act of 
2009, Pub. L. No. 111-24, § 401, 123 Stat. 1734, 1751-1754. 

[C] According to FDIC, funds placed on a prepaid card may or may not 
be covered by deposit insurance in the event of a bank failure, 
depending on how the account where the funds are held is set up and 
whether the bank or the card issuer's records at the time of the bank 
closing identify each cardholder's ownership interest. See [hyperlink, 
www.fdic.gov/consumers/consumer/news/cnsum12/paymentcards.html]. 

[D] Pub. L. No. 111-203, § 1031(a), 124 Stat. 1376, 2005 (2010). 

[End of table] 

[End of section] 

Appendix V: Comments from the Department of Education: 

United States Department of Education: 
Office of Postsecondary Education: 
The Assistant Secretary: 
1990 K St. N.W. 
Washington, DC 20006: 
[hyperlink, http://www.ed.gov] 

February 3, 2014: 

Ms. Melissa Emrey-Arras: 
Director, Education, Workforce, and Income Security Issues: 
U. S. Government Accountability Office: 
Washington, DC 20548: 

Dear Ms. Emrey-Arras: 

Thank you for providing the Department of Education (Department) with 
a draft copy of the U.S. Government Accountability Office's (GAO's) 
report titled, "College Debit Cards: Actions Needed to Address ATM 
Access, Student Choice, and Transparency" (GAO-14-9l; Job Code 250691). 

The Department's responses to GAO's recommendations follow. 

To help ensure that students can make an objective choice about 
whether to use a college card selected by their schools and have free 
and convenient access to federal student aid funds, the Secretary of 
Education should take the following actions: 

Recommendation 1: In consultation with the Consumer Financial 
Protection Bureau (CFPB), develop requirements that schools and 
college card providers present students with objective and neutral 
information on their options for receiving federal student aid 
payments. 

Response: The Department concurs with this recommendation and is 
working with CFPB and others on college debit cards as we continue to 
prepare for negotiated rulemaking on cash management issues. This 
negotiated rulemaking process began on November 20, 2013, with 
publication of a Federal Register Notice. In that notice, we announced 
our intention to establish a negotiated rulemaking committee to 
prepare proposed regulations to address program integrity and 
improvement issues for the Federal Student Aid programs authorized 
under title IV of the Higher Education Act of 1965, as amended (HEA). 
These negotiated rulemaking sessions will begin on February 19,2014, 
and will conclude on April 25, 2014. 

After completing negotiations, we will publish proposed rules in the 
Federal Register for comment by the general public, followed by final 
published regulations. A key issue that will be addressed in these 
negotiations is an institution's responsibility for cash management with
respect to how it disburses a student's federal student aid payments 
(with particular emphasis on the use of debit cards to distribute 
credit balances on those student aid funds). Credit balances are those 
student aid funds that are distributed directly to a student after his 
or her institutional charges are paid. Along with discussion of other 
issues associated with this effort, we plan to discuss potential 
requirements for institutions and card providers to present students 
with information on their options for receiving their credit balances. 

Recommendation 2: Provide a specific definition for what constitutes 
"convenient access" to ATMs or branch offices of debit and prepaid 
card providers where students will not incur costs in making cash 
withdrawals of federal student aid Response: The Department concurs 
with the recommendation and, as noted above, will begin negotiations 
on proposed regulations related to cash management issues on February 
19, 2014. In addition to the issue discussed above (and to other 
related issues of cash management), we are particularly interested in 
ensuring that students enjoy convenient and free access to their student
aid funds. Negotiators will discuss what "convenient access" means in 
this regard. Again, the negotiations will be completed on April 25, 
2014, to be followed by publication of proposed rules, receipt of 
public comment, and, ultimately, final regulations. The Department's
overarching goal is to protect a student's right to receive his or her 
federal student aid without cost, or with minimal cost, and in a 
convenient manner. 

The Department appreciates your examination of this important issue. 
We are committed to the continued development of policies and rules 
that help ensure efficient, convenient, and fair access to federal 
student aid, including through college debit cards. You will find 
enclosed some technical comments based on our review of this report. 

Sincerely, 

Signed by: 

Brenda Dann-Messier: 
Acting Assistant Secretary: 

Enclosure: 

[End of section] 

Appendix VI: Comments from the Bureau of Consumer Financial Protection: 

CFPB: 
Consumer Financial Protection Bureau: 
1700 G Street, N.W. 
Washington, DC 20552: 
[hyperlink, http://consumerfinance.gov] 

January 31, 2014: 

Alicia Puente Cackley, Director, Financial Markets and Community 
Investment: 
Melissa Emrey-Arras, Director, Education, Workforce, and Income 
Security Issues: 
U.S. Government Accountability Office: 
441 G Street NW: 
Washington, DC 20548: 

Dear Ms. Cackley and Ms. Emrey-Arras: 

Thank you for the opportunity to comment on the report College Debit 
Cards: Actions Needed to Address ATM Access, Student Choice, and 
Transparency, covering the functions, benefits, and concerns 
surrounding the emergence of debit and prepaid cards in the higher 
education market. We appreciate the Government Accountability Office 
(GAO) staff's consultation with Consumer Financial Protection Bureau 
(Bureau) staff during the research phase of this report. This report 
will help to bring greater insights on opportunities to increase 
transparency and choice for students. 

Here at the Bureau, we are dedicated to empowering consumers to make 
smart financial decisions. In our effort to better understand how 
financial products are marketed to college and university students, we 
have reached out to many colleges and universities, financial 
institutions, as well as to students and their families. We found that 
partnerships between financial institutions and institutions of higher 
education have shifted: partnerships to market or offer debit and 
prepaid card products to students now outnumber college credit card 
affinity agreements. 

Congress enacted reforms to help consumers better understand the 
nature of these marketing partnerships. The Credit Card 
Accountability, Responsibility, and Disclosure Act of 2009 (CARD Act) 
requires credit card issuers to report to the Bureau the terms and 
conditions of any college credit card agreement with an institution of 
higher education or affiliated organization. This includes the number 
of credit card accounts, the amount of payments made by the issuer to 
the institution, the number of new accounts, and a copy of any 
agreement between the company and the college or university. 

The CARD Act requirement is limited to credit cards and does not 
include other financial products marketed through schools. In a public 
comment submitted to a Bureau Request for Information, the National 
Association of College and University Business Officers (NACUBO) 
described several best practices, particularly as they relate to debit 
card arrangements used to access student loan and scholarship 
proceeds. NACUBO urges institutions to “publicly disclose the terms of 
any agreements.”[Footnote 1] 

Making these agreements available for students and their families is a 
sign of a financial institution's commitment to transparency when 
marketing deposit accounts, prepaid cards, financial aid disbursement 
accounts, and other financial products. However, failure to disclose 
the nature of these agreements raises potential consumer protection 
risks. 

According to a survey of school officials, 69 percent of debit card 
arrangements are already available to the public. But finding these 
agreements can be challenging. A member of the public may even need to 
file a formal request under state open records laws to access them. 
Easier access to these arrangements will increase the public's 
confidence that these agreements are structured to help students build 
a bright financial future. 

Consequently, we concur with the report's recommendation that, “to 
help ensure a comprehensive understanding of the agreements between 
colleges and debit and prepaid card providers, Congress should 
consider requiring that providers file these agreements with CFPB for 
public review, and provide other relevant information, such as 
payments between schools and the providers and fees charged to 
students.” Given the shift in the marketplace, this warrants further 
exploration. 

The report also noted the need to ensure that students are presented 
options to access their student loan and scholarship funds in a 
neutral fashion. Many students have reported to the Bureau that it is 
not always apparent that they have a choice when seeking to access 
their financial aid funds. Markets cannot function properly when a 
consumer's choice is unclear. Honest providers of financial products 
are disadvantaged when competitors violate the law. 

Many institutions of higher education are concerned about debit card 
providers that employ unfair or deceptive tactics to market products 
to students. As the report notes, federal financial regulators reached 
a settlement with Higher One, one of the largest participants in this 
market. The alleged conduct by Higher One was deeply troubling, and 
the Bureau will continue to monitor this market closely and take 
action as appropriate to ensure the law is being followed. 

We also look forward to continuing our work with other agencies, 
including the Department of Education, to correct deficiencies in this 
market. 

Sincerely, 

Signed by: 

Rohit Chopra: 
Assistant Director & Student Loan Ombudsman: 

Footnote: 

[1] See [hyperlink, http://www.regulations.gov/#!documentDetail;D=CFPB-
2013-0003-0068] for the full text of the public comment. 

[End of section] 

Appendix VII: GAO Contacts and Staff Acknowledgments: 

GAO Contacts: 

Alicia Puente Cackley, (202) 512-8678 or cackleya@gao.gov: 

Melissa Emrey-Arras, (617) 788-0534 or emreyarrasm@gao.gov: 

Acknowledgments: 

In addition to the contacts named above, individuals making key 
contributions to this report were Jason Bromberg and Michelle St. 
Pierre, Assistant Directors; Amy Anderson; Rachel Beers; William 
Colvin; Daniel Newman; and Christopher H. Schmitt. In addition, key 
support was provided by Bethany M. Benitez; William Chatlos; John 
Mingus; Barbara Roesmann; and Jena Sinkfield. 

[End of section] 

Footnotes: 

[1] For this report, we define federal student aid programs as 
financial aid programs authorized under Title IV of the Higher 
Education Act of 1965, as amended (codified at 20 U.S.C. §§ 1070-1099d 
and 42 U.S.C. §§ 2751-2756b). These programs include the Pell Grant 
Program and the William D. Ford Federal Direct Loan Program. 

[2] Nonprofit refers to not-for-profit colleges. Private colleges also 
can be for-profit, so we distinguish between nonprofit and for-profit. 

[3] Debit and prepaid cards are distinct from credit cards in that 
debit and prepaid cards do not provide a line of credit. The Credit 
Card Accountability Responsibility and Disclosure Act of 2009 (Credit 
CARD Act), Pub. L. No. 111-24, 123 Stat. 1734, mandated that GAO 
conduct a separate review of college affinity credit cards--credit 
cards issued in conjunction with a school or school-related 
organization. § 305(b), 123 Stat. at 1750-51. That report is scheduled 
to be issued in late February 2014. 

[4] In this report, we use prepaid card to refer to general-purpose 
reloadable cards. 

[5] For this report, we focus on the use of college cards to pay 
financial aid to students. A school may make student payments in other 
situations, including when (1) other payments are credited to a 
student's account, such as veterans educational benefits, education 
savings plans, or payments by other parties; or (2) a school's charges 
are reduced due to changes in a student's course load, housing, or 
meal plan, according to the National Association of College and 
University Business Officers. 

[6] Schools are not required to follow federal rules for making 
payments involving nonfederal funds. However, according to the 
National Association of College and University Business Officers, 
schools generally do so--because they must follow federal rules for 
federal money and because funds from multiple sources may collect in a 
student account. 

[7] See Department of Education, Office of Postsecondary Education, 
Disbursing or Delivering Title IV Funds Through a Contractor, "Dear 
Colleague" Letter GEN-12-08 (Apr. 26, 2012). 

[8] 15 U.S.C. § 45. 

[9] See 12 C.F.R. § 1005.4, § 1005.6. CFPB has issued an advance 
notice of proposed rulemaking as it considers extending Regulation E 
protections to prepaid cards. See Electronic Fund Transfers 
(Regulation E), 77 Fed. Reg. 30923 (May 24, 2012). According to CFPB 
staff, the rulemaking is expected to conclude in mid-2014. 

[10] CFPB's enforcement authority is limited; it has primary 
enforcement authority for consumer financial protection laws against 
large banks and certain nondepository entities, but not against 
smaller banks, which are supervised by the federal banking agencies. 

[11] We used IPEDS data to calculate the approximate number of 
colleges and universities that participated in federal student aid 
programs in the 2011-2012 school year. 

[12] In addition to the college cards we describe here, some schools 
also operate "closed loop" systems, in which cards connected to 
predeposited funds typically can be used for payments on campus only, 
or on-campus and at a limited number of near-campus merchants. This 
kind of card is not the subject of this report. 

[13] For our analysis, we relied upon the schools' descriptions of 
services provided under their card agreements, which we obtained 
largely from information provided to students on the schools' 
websites. We did not independently verify the services represented. 
See appendix I for details of our methodology. 

[14] Because there is no authoritative source for this information, we 
conducted an extensive search to identify schools with agreements. 
However, all schools with agreements may not have been identified 
through this process. We also excluded from our analysis 13 agreements 
for cards that use the school logo but otherwise offer no school-
related services. 

[15] Overall, while schools with student populations of 20,000 or more 
made up about 3 percent of all schools, they accounted for about 13 
percent of schools that had college card agreements. 

[16] For example, nonwhite students represented about 44 percent of 
enrollment at schools with agreements and 41 percent at schools 
without agreements. Similarly, students age 25 and older represented 
about 33 percent of students at schools with agreements and 34 percent 
at schools without. Schools with college card agreements had a 
slightly lower percentage of students receiving financial aid grants 
(federal, state, local, institutional, or other) than schools overall, 
and the average amount of aid students received was somewhat smaller 
as well. IPEDS data on student characteristics were not available for 
four schools with college card agreements, and we omitted these 
schools from our analysis. 

[17] About 65 percent of students receive some form of financial aid. 
However, Education staff told us they do not have information on how 
many of those receiving aid receive financial aid payments in excess 
of a school's charges. 

[18] According to CFPB, a nonbank is a company that offers consumer 
financial products or services, but does not have a bank, thrift, or 
credit union charter and does not take deposits. 

[19] Interchange fees are paid by a merchant (or an "acquirer"), and 
charged or received by a payment card network, in order to compensate 
a card issuer for its involvement in an electronic debit transaction. 
(An acquirer is an entity that contracts with a merchant to provide 
settlement for the merchant's electronic debit transactions over a 
payment card network.) For example, see GAO, Credit Cards: Rising 
Interchange Fees Have Increased Costs for Merchants, but Options for 
Reducing Fees Pose Challenges, [hyperlink, 
http://www.gao.gov/products/GAO-10-45] (Washington, D.C.: Nov. 19, 
2009). 

[20] In August 2012, Higher One acquired the assets of Campus Labs, 
which provides data collection, reporting, and analytics services to 
institutions of higher education. 

[21] Although several schools cited benefits from contracting out 
their student payment process, some schools told us they did not want 
to outsource the process, either to maintain control or because they 
believed they already were operating efficiently. 

[22] FDIC estimated that 17 percent of householders aged 15-24 were 
unbanked in 2011, although the percentage may be lower for college 
students because householders with a high school degree or some 
college education were less likely to be unbanked. See Federal Deposit 
Insurance Corporation, 2011 FDIC National Survey of Unbanked and 
Underbanked Households (Washington, D.C.: September 2012). 

[23] For example, some banks will not open new accounts for 
individuals with a history of overdrafts on prior bank accounts. 

[24] According to card providers, funds are available on college cards 
on the same day the school transfers funds because the funds can be 
deposited immediately into the cardholder account. Direct deposits 
into another bank account take longer because the transaction must be 
processed through the Automated Clearing House network and the 
receiving bank must verify the funds. Paper checks take the longest 
because they must be prepared, mailed to students or picked up, and 
cleared by the student's bank. 

[25] As we have noted, although financial education efforts by the 
private sector can be beneficial, they also can raise concerns about 
the objectivity of the information provided. See GAO, Financial 
Literacy: Enhancing the Effectiveness of the Federal Government's 
Role, [hyperlink, http://www.gao.gov/products/GAO-12-636T] 
(Washington, D.C.: Apr. 26, 2012); and Financial Literacy: A Federal 
Certification Process for Providers Would Pose Challenges, [hyperlink, 
http://www.gao.gov/products/GAO-11-614] (Washington, D.C.: June 28, 
2011). 

[26] We reviewed fee schedules for college cards from eight providers 
that together accounted for about 90 percent of the market we 
identified--Blackboard, Citibank, Heartland, Higher One, PNC, Sallie 
Mae, U.S. Bank, and Wells Fargo. We compared college card fees for 
account maintenance, ATM transactions, overdraft, account inactivity, 
debit transactions using personal identification numbers (PIN), and 
wire transfers with fees for banking products that a student might use 
as alternatives to college cards. We use "student checking" to refer 
to checking accounts specifically intended for, or targeted at, 
students, but not obtained through a college card agreement. We 
obtained the fee information in August and September 2013. 

[27] For additional information on the use of alternative financial 
services, see Federal Deposit Insurance Corporation, 2011 FDIC 
National Survey of Unbanked and Underbanked Households (Washington, 
D.C.: September 2012). 

[28] The Higher One fee for PIN transactions is for its basic account. 
Interchange fees vary based in part on whether a transaction is 
authenticated by PIN or signature. Under current debit rules, 
depending on the size of the bank involved, signature transactions can 
provide higher interchange revenue. For example, because Higher One 
contracts with a bank with less than $10 billion in assets, the 
company may receive higher interchange fees for signature transactions 
than for PIN transactions. For more information on interchange fees 
generally, see [hyperlink, http://www.gao.gov/products/GAO-10-45]. 

[29] According to FDIC staff, there may be disadvantages for signature 
transactions as well. For example, a signature transaction may be less 
secure from fraud than a PIN-based transaction. 

[30] Negotiated Rulemaking Committee; Public Hearings, 77 Fed. Reg. 
25658, 25659 (May 1, 2012). 

[31] We analyzed the comments, which were solicited by CFPB in its 
Request for Information Regarding Financial Products Marketed to 
Students Enrolled in Institutions of Higher Education, 78 Fed. Reg. 
8114 (Feb. 5, 2013). 

[32] Some card providers indicated that students may access their 
funds through other mechanisms that do not incur fees, such as using 
the card to make purchases or using the cash-back option offered by 
some retailers, although the latter option may incur a $0.50 PIN fee, 
as noted earlier. 

[33] We estimated the average ATM surcharge fee in 2012 was $2.10. See 
GAO, Automated Teller Machines: Some Consumer Fees Have Increased, 
[hyperlink, http://www.gao.gov/products/GAO-13-266] (Washington, D.C.: 
Apr. 11, 2013). Financial institutions operate ATMs as a convenience 
to their accountholders, who generally do not pay fees to use these 
ATMs. However, financial institutions assess a surcharge when a 
transaction is made by nonaccountholders, and independent ATM 
operators assess surcharges on most customers. 

[34] Students at schools with only one in-network ATM on campus may 
have access to other in-network ATMs near the campus, particularly if 
it is in an urban setting. 

[35] Higher One waives the $5.95 monthly service fee on its premier 
account if the accountholder deposits $300 or more in funds per month 
other than financial aid payments. 

[36] 34 C.F.R. § 668.164(c)(3)(v). Education guidance specifies that 
the intent of these regulations is to ensure that students can make 
unlimited withdrawals from their on-campus ATMs without incurring a 
fee. While some students may want to withdraw their entire financial 
aid payment when it becomes available, other students may make smaller 
withdrawals over time. 

[37] See 34 C.F.R. 668.164(c)(3)(v). 

[38] See Negotiated Rulemaking Committee; Public Hearings, 77 Fed. 
Reg. 25658 (May 1, 2012). 

[39] See Negotiated Rulemaking Committee, Negotiator Nominations and 
Schedule of Committee Meetings--Title IV Federal Student Aid Programs, 
Program Integrity and Improvement, 78 Fed. Reg. 69612 (Nov. 20, 2013). 

[40] For example, one provider told us that data are aggregated in a 
way that does not allow them to identify the fees specifically 
associated with their college cards and another provider said some 
cardholders are not students (such as faculty). 

[41] See [hyperlink, http://www.gao.gov/products/GAO-11-614]. 

[42] FDIC determined that the two companies violated Section 5 of the 
Federal Trade Commission Act by charging student accountholders 
multiple insufficient funds fees from a single transaction; allowing 
accounts to remain in overdrawn status for long periods and allowing 
these insufficient funds fees to continue accruing; and collecting the 
fees from subsequent deposits to the students' accounts, typically 
funds for tuition and other college expenses. 

[43] The settlement also required Higher One to not make misleading or 
deceptive representations or omissions in its marketing materials or 
disclosures and to institute a sound compliance management system. 

[44] The settlement also imposed civil money penalties of $172,000 for 
The Bancorp Bank and required it to take certain steps to improve its 
compliance and risk management, and provide FDIC details related to 
the termination of its relationship with Higher One. 

[45] The parties have been working to resolve details, and a final 
settlement agreement requires court approval. SeeHigher One Holdings, 
Inc., Current Report (Form 8-K), (Nov. 5, 2013). 

[46] Two college card providers noted that schools sometimes have 
exclusivity agreements with other financial services providers that 
can affect the college card services--for example, one card provider 
said that at some large public schools, it cannot locate an ATM, or 
have access to students, in areas used for intercollegiate sports 
because another financial institution already secured that exclusive 
right. 

[47] Based on information obtained from schools and providers, we did 
not identify instances of cross-marketing, in which providers used 
student personal information obtained from schools to market products 
other than their debit or prepaid cards, or to share such information 
with third parties for marketing purposes. 

[48] An additional option for deposit to another account provides for 
electronic filing of documentation, but requires a 6-day hold on the 
account, according to the provider. 

[49] See Department of Education "Dear Colleague" Letter GEN-12-08; 34 
C.F.R. § 668.164(c)(3)(ii). 

[50] See Bureau of Consumer Financial Protection, Reminder: Accessing 
Your Scholarships and Student Loan Funds, Sept. 5, 2013, accessed Nov. 
12, 2013, [hyperlink, http://www.consumerfinance.gov/blog/reminder-
ccessing-your-scholarships-and-student-loan-funds/]. 

[51] We did not perform an in-depth review of this college card 
provider's products because it did not meet our criteria for the 
largest card providers, described in appendix I, but our review of 
fees associated with that provider's college card student accounts 
found them not significantly different from most college card fees we 
describe earlier in this report. 

[52] According to Education, schools must provide the department with 
copies of contracts they enter into with "third-party servicers," as 
outside vendors are known, but only upon request. Education staff told 
us that while the agency collects general information on third-party 
servicers, they do not have the ability to identify college card 
agreements. CFPB staff similarly told us they do not broadly collect 
information related to the use of the cards or the agreements between 
schools and issuers. CFPB can investigate (through supervision, 
examinations, or enforcement) a report of an unfair or abusive 
practice, but the review would be specific to the facts in the case. 
As part of an investigation, CFPB could examine specific agreements. 

[53] See 34 C.F.R. § 668.25(e)(2). Education's general authority to 
request college card contracts from schools is limited to instances 
when the contract involves processing any aspect of the institution's 
participation in federal student aid programs. 

[54] See Bureau of Consumer Financial Protection, CFPB Calls on 
Financial Institutions to Publicly Disclose Campus Financial 
Agreements, Dec. 17, 2013, accessed Jan. 10, 2014, [hyperlink, 
http://www.consumerfinance.gov/newsroom/cfpb-calls-on-financial-
nstitutions-to-publicly-disclose-campus-financial-agreements]. 

[55] For example, see GAO, Troubled Asset Relief Program: Further 
Actions Needed to Enhance Assessments and Transparency of Housing 
Programs, [hyperlink, http://www.gao.gov/products/GAO-12-783] 
(Washington, D.C.: July 19, 2012); Financial Stability: New Council 
and Research Office Should Strengthen the Accountability and 
Transparency of Their Decisions, [hyperlink, 
http://www.gao.gov/products/GAO-12-886] (Washington, D.C.: Sept. 11, 
2012); and Federal Reserve Bank Governance: Opportunities Exist to 
Broaden Director Recruitment Efforts and Increase Transparency, 
[hyperlink, http://www.gao.gov/products/GAO-12-18] (Washington, D.C.: 
Oct. 19, 2011). 

[56] Pub. L. No. 111-24, § 305(a), 123 Stat. 1734, 1750 (codified at 
15 U.S.C. § 1637(r)); 12 C.F.R. § 1026.57. College affinity credit 
card issuers must submit to CFPB annually, among other things, copies 
of any college credit card agreements to which the card issuer was a 
party during the prior year, the amount of any payments the issuer 
made to a school or affiliated organization under the agreement during 
the same period, and the number of credit cards opened under the 
agreement during the period. 12 C.F.R. § 1026.57(d)(2). The schools 
must disclose publicly any marketing agreement made with a card 
issuer. 12 C.F.R. § 1026.57(b). 

[57] See [hyperlink, http://www.consumerfinance.gov/credit-
cards/college-agreements]. The Federal Reserve also maintains a 
database for the years for which it was responsible for the 
information. See [hyperlink, 
www.federalreserve.gov/collegecreditcardagreements]. 

[58] 20 U.S.C. § 1094(h)(1)(C). 

[59] In developing this list, we also identified a small number of 
agreements for "co-branded" debit cards that used the school logo but 
otherwise provided no services to the school. We excluded these 
agreements from our review. 

[60] The Higher Education Act of 1965, as amended, requires 
institutions that participate in federal student aid programs to 
report data on enrollments, program completions, graduation rates, 
faculty and staff, finances, institutional prices, and student 
financial aid. See 20 U.S.C. §§ 1070-1099d, 42 U.S.C. §§ 2751-2756b, 
and 20 U.S.C. § 1094(a)(17). 

[61] Student checking accounts here means accounts offered to college 
students generally, and not through a college card agreement. 

[End of section] 

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