Dive Brief:
- The practice of offering students pre-paid cards may find a hurdle in proposed rules governing Title IV tuition refunds.
- Under the rules, institutions must offer students a list of options for receiving their refunds with a pre-existing bank account as the first choice, and they must get student consent to share personal information with a third-party vendor before sharing it.
- Once money is disbursed, students must have access to surcharge-free ATMs to get the money and 30 days of access to the funds without any fees at all.
Dive Insight:
The U.S. Department of Education is set to finalize the regulations, which already have the support of consumer advocacy groups, by Nov. 1. According to the description of the proposed regulations, colleges and universities market pre-paid cards as a more convenient option than check-cashing, but in some cases, they are a way to pass on the cost of administering the Title IV program to students.
Administrators, however, fear that a return to offering refunds as checks could be equally damaging to students. University Business reports that Houston Community College saw many uncashed checks in the past because of address mistakes and found students turning to high-priced local check-cashing establishments to get their money.