Abusive Fees

If this story were about college students’ not having the maturity or responsibility necessary to keep from racking up heavy credit card debt, my take would be “too bad, so sad” along with some commentary about the real world.  I don’t fault companies when individuals make bad decisions.  I do fault companies, however, when their practices are abusive, and in this case it’s probably good that the federal government is stepping in:

The Obama administration is taking on banks and other financial firms with new rules that would ban certain fees they can charge college students as well as restrictions on how they market products on campuses.

The U.S. Department of Education on Friday unveiled draft regulations on debit cards and other financial products offered on campuses. Consumer advocates have long sought the rules, which have drawn the ire of the financial services industry.

The draft regulations target two categories of financial products. First, the department is seeking to place the most stringent restrictions on debit cards and prepaid cards that colleges use to directly disburse federal grants and loans to students. For those accounts, the department would prohibit point-of-service fees, overdraft or insufficient funds charges, and ATM withdrawal fees.

A second category includes checking accounts or other financial products that are offered on campus or marketed to students under an agreement with the college. For example, some banks offer debit cards that are co-branded with the logo or mascot of a college. Those types of products would be prohibited from charging account access fees or in-network ATM withdrawal fees.

What is the point of having an account if you have to pay to access it?

Of course, as with so much else it does, the federal government regulations go too far–why shouldn’t someone be penalized with overdraft charges?–but other than that these regulations seem both reasonable and overdue.


Students pay for fee-heavy debit cards

Convenience can be costly: Students who receive financial aid via college-sponsored debit cards pay heavy fees.

California lawmakers have advanced two bills that could give college students access to low-cost online textbooks.

When public school isn’t free

Illinois public schools are charging “hefty” fees for textbooks, technology, bus rides and classes, reports the Chicago Tribune. Some districts charge a “registration fee.”

“This is like private school,” said parent Gio Chavez, who walked out of Oak Lawn Community High School’s registration this week shell-shocked. The final tally for her sophomore son’s classes: $665.

The bill started out with a required $275 registration fee but ballooned as a variety of course fees got tacked on, including $25 for Culinary Arts I and II classes (her son Seth wants to be a chef); $15 for a consumer education course required for graduation; $30 for a Woods I class; and $250 for driver education.

Chris Berta spent about $886 on required and optional fees for her high school freshman son and middle-school-age daughter in Naperville Community Unit School District 203.

Most states don’t allow public schools to charge parents, but Illinois courts have upheld the fees, reports the Trib. Low-income parents can ask for a waiver.

District policies vary widely, the Trib reports.

Suburban Naperville charges a general fee of $68 to $81, plus a $29 technology fee, plus charges for P.E. classes.  At the high school level, students pay extra for more than 100 courses ranging from English ($11), a required course, to French I ($24) to nutrition ($45).

School officials say course fees cover “workbooks, paperback novels and other ‘consumable’ materials.”

Pay to play” has become “pay for regular classes” at a growing number of schools nationwide, reports the Wall Street Journal.

. . .  in Medina (Ohio), the charges imposed on the Dombi family’s four children include $75 in generic school fees, $118.50 for materials used in biology, physics and other academic courses, $263 for Advanced Placement exams and $3,990 to participate in cross-country, track and band. That’s not counting the $2,716.08 the Dombis paid in property taxes specifically earmarked for the schools.

The oldest daughter gave up choir to save $200, but the total for the year was $4,446.50.