NerdWallet, a financial site which helps people understand their economic options, revisited its 2016 study and found the same 20 banks offering checking accounts affiliated with popular universities in the U.S. haven’t changed their overdraft fees and charges since the study was published.
The new study was published on NerdWallet’s site and highlighted how university-sponsored banks are charging college students more than $795 million on overdraft and late payment fees alone.
Within NerdWallet’s 2016 study, they included The Consumer Financial Protection Bureau’s (CFPB) Safe Student Account Toolkit released in 2015, to help higher institutions determine whether they wish to co-sponsor a checking or prepaid account. They hoped that colleges would use the toolkit to make adjustments to their preexisting co-sponsored bank agreements to make it cheaper for students, but few institutions made any changes since the study was published last year.
The average fee the banks studied charged for maintaining an account remained $0 for students. Three banks’ overdraft fees expanded, and two banks decreased and one increased the total cost of overdraft fees charged a day in comparison to the data from the 2016 study.
University affiliated bank agreements usually last between five to 10 years. However, each January the two parties meet and conduct a review to evaluate the performance of the previous year and determine whether they wish to extend the initial term.
In 2015, there were at least 832 colleges that had contracts with banks offering debit or prepaid card services to their students, according to a report by the U.S. Department of Education. Thirty-three percent of students who had a credit card and are graduating within the next six months had been late with a credit card payment at least once, according to an Experian Graduate Survey Report.
