Students should withdraw from some credit card programs

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(NNPA)—As 21st Century employers continue to seek a highly-trained workforce, the marketable value of a college education has never been higher. At the same time, the rising costs of a college education force growing numbers of families and students to seek federal financial aid.

In FY 2012, according to the Department of Education, federal student aid programs provided about $142 billion in grants and loans to 15 million students. Although a large portion of these funds are paid directly towards tuition, many students also receive a portion of their aid to cover the costs of textbooks or living expenses. To facilitate these direct student payments, many colleges have partnered with financial firms that provide debit cards and/or bank accounts. These disbursement products can serve as a revenue opportunity for colleges; but they may not be the best deal for students.

In a recent report, the Government Accounting Office identified 852 colleges and universities with agreements to offer either a prepaid debit card or a debit card linked to a regular checking account. In instances that the debit card becomes part of the student’s campus identification, the single debit card can also be used to access banking services.

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