University debit cards screw over students

9/4/2010: Brent Hunsberger of the Oregonian has a very interesting story about how “Higher One Inc.” partners with LCC, PSU, and SOU to issue students debit cards linked to their university financial aid and tuition payments. And then nails the students with a complex myriad of well-hidden fees. Many students don’t know How to Build Credit and they also don’t realize that by not paying charges and fees soon after they’ve got them could possibly harm their credit score.

For one, Higher One charges an “abandoned account” fee of up to $19 a month. Students get this fee if they don’t use their account after nine months — a trigger point that seems to coincide with summer break.
They also pay $2.50 when they don’t use a Higher One ATM, located only on college campuses.
There’s even a link on each school’s card web site: “How to use the OneAccount for free.” Students must then click through three pages to read the fee schedule.
The most confusing fee? The cards are stamped “debit” on front. “THIS IS NOT A CREDIT CARD!” warns the website for Mt. Hood Community College’s “Mountain Card.”
Yet students who swipe the card as a “debit” and enter their personal identification number get charged a 50-cent fee each time. To avoid that fee, they must press “credit” and sign the receipt.

Classic. Does anyone know how the UO system works?

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