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Friday, August 10, 2012

Assessing Scholarship and Student Loan Funds

The Consumer Financial Protection Bureau (CFPB) today issued a consumer advisory for students expecting to receive scholarship and student loan proceeds onto – what appears to be – a school-endorsed debit card.

Many college students, especially those enrolled in community colleges or who live off-campus, receive scholarships, grants, and student loans that are for more than the cost of their tuition. These funds help them pay rent, get to and from school, and cover other costs, like textbooks. Many schools work with third-party financial companies to disburse these funds directly to students.

Things to keep in mind

Consumers should remember the following:
  • You can’t be required to use a specific bank or card.
    There may be a financial institution that operates on your campus, but you generally can’t be required to use a specific account or card to access your student aid. If you have received a federal student loan, your school must provide a paper check or cash option.
  • Consider choosing an account before arriving at school.Shop around, and don’t feel limited by the banks operating ATMs on or near campus. Some financial institutions don’t charge you for using any ATMs, and some will automatically reimburse you for fees charged for using an out-of-network ATM. Many institutions also provide a mobile phone app to remotely deposit paper checks.
  • If your school offers it, sign up for direct deposit as soon as possible. If your school offers direct deposit, you may be able to provide the school with your account information in order to access your funds more quickly.
Share Your Experiences with the CFPB
If you have a specific problem with your student checking account and need to resolve it, please file a complaint with CFPB at

If you want to just share your experience with student checking accounts and debit cards, tell the CFPB your story and use the tag “financial aid" at