Student debit cards bill passed by House


Measure aims to protect students from fees from financial institutions.

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BY JACOB PALMER | DIGITAL NEWS EDITOR

A measure that aims to protect students from fees from financial institutions passed the House on a 36-24 vote.

The bill would mandate universities to adhere to “federal guidelines when entering into contracts with third-party institutions,” the Statesman Journal reports.

“Students often believe these debit cards are the only way to receive financial aid to cover books and living expenses. Cards often carry the school logo or may be linked to a student ID. This may give the impression that the card is official or required for distribution of financial funds,” said Rep. Nancy Nathanson, D-Eugene, who carried the bill.

A presentation by the Oregon Student Association submitted in March to the House Committee on Higher Education, Innovation and Workforce Development said six state universities and community colleges contract with Higher One, a higher education financial firm that reportedly dominates 56 percent of the campus debit market. A 2013 survey by the Associated Students of Portland State University found that 69 percent of respondents wanted an alternative to Higher One for financial aid disbursement. Seventy-eight percent said Higher One’s fees were not reasonable or acceptable.

The universities that contract with Higher One are:

  • Lane Community College
  • Mount Hood Community College
  • Oregon Institute of Technology
  • Portland State University
  • Rogue Community College
  • Southern Oregon University

From OregonLive.com:

Nathanson said some non-bank financial firms enter agreements with Oregon colleges and universities to administer financial aid payments and disbursements. These contracts are not subject to oversight, and the companies are often far less regulated than traditional banks and credit unions, according to a news release issued Wednesday by the House Majority Office.

Nathanson said students often incur swipe fees when they use personal identification numbers instead of taking time to sign transactions. Some companies with few ATMs charge students $2.50 to use out-of-network cash machines, she said. And some charge $25 to transfer financial-aid money out of their accounts into a student’s bank account, she said. The bill says that some for-profit financial firms give post-secondary schools incentives that may create conflicts of interest. It would require institutions to make contracts with such firms public, posting them on school Web sites.

The bill now heads to the Senate.

 




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