Dive Brief:
- Partnerships between banks and colleges that have allowed schools to distribute financial aid awards through prepaid cards now have a little more regulation to deal with.
- The Department of Education announced new regulations Wednesday requiring schools to give students more flexibility and control over how and where they receive financial aid payments.
- The regulations also prohibit institutions from partnering with banks that charge "excessive and confusing fees" to access the financial aid payments.
Dive Insight:
The Government Accountability Office urged the Department of Education in February to tighten regulations surrounding the use of prepaid debit cards for financial aid disbursement, just as the Department started considering the regulations.
While it has become easier to disburse the aid on cards and some colleges argue there is a higher success rate when students are not left to receive checks in the mail, consumer advocates have accused schools of allowing too many fees associated with accepting and using the money.