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

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. 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.

GAO has concerns with multiple areas of the program including:

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.