Woe, woe to America’s (financially illiterate) college students

Considering how much our society promotes college attendance, it sure does seem as if there’s never been a worse time to be a college student. From being smart enough to gain admittance to a college that charges $50,000 a year but needing someone to tell them it will be expensive to pay back all those loans, to being subjected to the fees a bank said it would charge them, our best and brightest are just so put-upon these days.

Here’s the outrage du jour, as explained in an AP story:

As many as 900 colleges are pushing students into using payment cards that carry hefty costs, sometimes even to get to their financial aid money, according to a report released Wednesday by a public interest group.

Colleges and banks rake in millions from the fees, often through secretive deals and sometimes in apparent violation of federal law, according to the report, an early copy of which was obtained by The Associated Press.

More than two out of five U.S. higher-education students — more than 9 million people — attend schools that have deals with financial companies, says the report, written by the U.S. Public Interest Research Group Higher Education Fund.

“For decades, student aid was distributed without fees,” said Rich Williams, the report’s lead author. “Now bank middlemen are making out like bandits using campus cards to siphon off millions of student aid dollars.”

That truly sounds terrible: Students being forced to pay fees for a financial service their colleges used to provide for free. So, what exactly are these fees and services? The story continues with examples from a company called Higher One:

Among the fees charged to students who open Higher One accounts: $50 if an account is overdrawn for more than 45 days, $10 per month if the student stops using his account for six months, $29 to $38 for overdrawing an account with a recurring bill payment and 50 cents to use a PIN instead of a signature system at a retail store.

So, overdrawn accounts prompt a fee? And inactive ones? Well, there must be something worse than that. A fee for using a PIN? That seems outrageous … except that the fee can be avoided by signing for the purchase instead.

Ahem.

It took about two minutes of clicking around on Higher One’s website to find all the fees disclosed. In short, the fee schedule reads exactly like that of a traditional “free” checking account. Almost every routine service is provided free of charge — including receiving deposits, such as financial aid payments.

Another bank mentioned in the story, TCF Bank, lists no monthly fees or other charges for routine services on its website. Admittedly, I didn’t check every bank mentioned before getting the feeling this story has been overblown.

To the degree colleges are strong-arming students into signing up for accounts before they’ve had a chance to shop around, and taking money from the banks along the way, that’s unseemly of them. Maybe worse. And if the colleges are breaking the law in the process, they should be held accountable.

But forgive me for being less concerned about the colleges’ behavior than about the apparent fact we are raising a generation of college students who are credulous enough to sign up for a banking service promoted by State U without taking note of the charges, who need someone to tell them that it will be expensive to pay back tens of thousands of dollars worth of loans, and who generally come off in these sob stories as so coddled and helicopter-parented that they can’t be trusted to make basic life decisions for themselves.

If that offends any responsible college students out there, take it up with your financially illiterate classmates. They’re the ones making your generation look bad.

– By Kyle Wingfield

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55 comments Add your comment

Rafe Hollister- trying to save the Choom Gang

May 30th, 2012
5:57 pm

Having recently had one to graduate, I think I can say, college students can not effectively be told anything whatsoever. They think ole foggies like Dad just make things way too complicated. They can handle anything, until the first hardship arrives. Mine is ill equipped to deal with anything unexpected because he doesn’t listen, until he is in trouble. Males are obviously more dense than females, but they seem destined to repeat every mistake we made, no matter how much advice we give them.

Kyle Wingfield

May 30th, 2012
6:00 pm

I Report: Threadjacking on the first comment? Are you asking to be put in moderation?

Rafe Hollister- trying to save the Choom Gang

May 30th, 2012
6:00 pm

I’m not sure that there is anything the banks, schools, or other financial institutions can do to get through to these kids. They want the money now, don’t have time for the details, and will whine later about the costs.

real john

May 30th, 2012
6:04 pm

Good article Kyle. I actually had read that same article earlier today and thought the same thing. Oh the horror that someone would have to pay an overdraft fee??

The real articles need to deal with colleges charging students $30, 40, 50K a year when students are graduating with English or liberal art degrees that 99% of the graduates will have pretty low paying jobs. Meanwhile many of the top adminstrators, professors, and college presidents are doing just fine.

I graduated back in 2001 from a respectable state university and it was very affordable. However, unless someone is going for a very specific degree such as engineering, medicine, law, I think going to a community college is really the way to go

Kyle Wingfield

May 30th, 2012
6:05 pm

Rafe: I received financial aid, always had to deposit a paper check and wait for it to clear, and made do until then with the money I’d earned or saved from before. And, despite what some of my blog readers would say, I turned out OK.

I even had an overdraft fee or two along the way. It didn’t take many before I learned to pay better attention and not do that again…

Lil' Barry Bailout (Unexpectedly Revised Downward--Again)

May 30th, 2012
6:09 pm

I’ve come to the conclusion based on my own experience with recent grads that nearly all are economically retarded.

Many young people seem to think that businesses that provide products (but especially services) should make no profit for doing so. For example, they have no concept of what a secure, networked, hardened ATM machine costs, or that someone has to be paid to drive around filling them up with cash. They don’t understand why they have to pay a fee to use an ATM provided by a bank that they don’t have an account with.

Sadly, this kind of economic retardation and ignorance is not limited to our youth–full grown adult Democrats are no better.

Hillbilly D

May 30th, 2012
6:14 pm

One of the smartest things people can teach their kids is how to handle money. Of course, they have to know themselves, in order to teach it.

The real articles need to deal with colleges charging students $30, 40, 50K a year when students are graduating with English or liberal art degrees that 99% of the graduates will have pretty low paying jobs. Meanwhile many of the top adminstrators, professors, and college presidents are doing just fine.

That’s the elephant in the room. College and universities are big businesses, in spite of their protestations.

Don't Tread

May 30th, 2012
6:14 pm

The quality of college graduates isn’t what it used to be. I work with way too many who are not only financially illiterate, but functionally illiterate as well. Don’t expect them to provide you with quality work (but they can help you with anything regarding Facebook).

I Report (-: You Whine )-: mmm, mmmm, mmmmm! Just sayin...

May 30th, 2012
6:25 pm

Kyle- Did I not highlight the education aspect of the comment??

MarkV

May 30th, 2012
6:30 pm

Isn’t it amazing, how the new generation is always so bad and the old generation knows so much better and does everything well, until the new generation becomes the old generation and becomes smart and complains about the new new generation…?

md

May 30th, 2012
6:40 pm

Give this administration time and they will find a way to make it “fair” (see credit card bill). Should be no problem spreading those fees around to those that are responsible enough to not have any…..how dare they know the rules and abide by them.

Rafe Hollister- trying to save the Choom Gang

May 30th, 2012
6:43 pm

MarkV

When you get to the age of reason, as my Dad called it, 35 years old, you realize that the old generation knew a great deal about how the world operates, but at 19, I was not receptive to their advice. You are right in that this happens generation after generation, but that does not lessen the frustration the older generation feels.

Rafe Hollister- trying to save the Choom Gang

May 30th, 2012
6:46 pm

Kyle, you are right, some college age kids are not as dense as others financially. You did turn out well and obviously quickly learned from your minor mistakes. Some however, are so dense, it takes major indebtedness and large mistakes, some of which haunt them all their lives, to get through to them.

md

May 30th, 2012
6:47 pm

Not hijacking but definitely informing…..the elected dictator apparently has only a couple months to live…..Venezuela should get interesting.

MarkV

May 30th, 2012
6:50 pm

Rafe Hollister@ 6:43 pm

No quarrel with you on that one!

md

May 30th, 2012
6:54 pm

Yes Mark……it is cyclical……I think that is why it is called experience/knowledge. It works much the same as when all parents enter their stupid stage……which coincides with their children’s early teens to early twenties. Seems some parents are staying stupid a wee bit longer these days though as is apparent from Kyles info.

Thomas Heyward jr

May 30th, 2012
7:04 pm

Someone SHOULD look after……….your typical Romney/Obama supporter.(or those that would endorse Newt Gingrich).
.
I think that they should fall under(mentally) the Americans with Disabilities Act…IMHO.
.
Just saying.

Sister Sarah

May 30th, 2012
7:23 pm

Won’t be my kid. Speak for yourselves. No need to worry about mine and ridiculous loan amounts, because I’m sacrificing to pretty much pay for the education out of my own pocket. Of course the school is nice enough to throw in some grant money because of its 100% “needs met” policy. Considering my income, great deal. Every little bit helps. Got my kid’s first AMEX yesterday. I applied for it and it will be used to manage finances in a disciplined manner under MY instruction to build credit as I (hovering around 800 FICO) and target purchases to accumulate rewards that will essentially pay for her ticket to wherever she wants to see in the world. This whole thing is just a big game and you just have to figure out how to play it. I use everything at my disposal to set her up so that she is solid financially early on. My position is “you have no choice and must do it MY way. You will thank me later”. Especially as long as I’m paying, I’m saying.

On another note, wow!! Kyle Wingfiled got “financial aid”! I always thought hard core conservative types rejected the idea of “handouts”? I guess not. Or is that considered a “hand up” in Kyle’s case? I guess it just depends on who you are.

Aquagirl

May 30th, 2012
7:42 pm

This is news? I got one of these cards a few years ago when I was taking evening courses. IIRC, the thing just showed up in the mail and I had to do a fair amount of reading to even figure out what the h3ll was going on. Then I had to do more looking around to figure out I could still get my financial aid payment without opening an account and using the card. It wasn’t terribly straightforward, even for someone like me with financial experience. Also, I then had to wait for my financial aid…not a big deal for somebody who can pay upfront for classes and register before the required courses are full, or you’re stuck with a 10 pm lab.

I distinctly remember thinking “man, this is not going to end well for a whole bunch of young, dumb kids.” Those banks and colleges are total @$$holes. They do quite a hard sell on a captive audience.

md

May 30th, 2012
7:46 pm

Seems the helicopter parent Kyle referred to just buzzed in……and “financial aid” does include loans in case one wasn’t aware.

md

May 30th, 2012
7:49 pm

“Those banks and colleges are total @$$holes. They do quite a hard sell on a captive audience.”

And there’s the blame card……blaming others for ones own ignorance.

We choose everything we do…….those kids need that lesson if they aren’t smart enough to figure it out. Life’s lessons are what creates experience.

Aquagirl

May 30th, 2012
8:12 pm

And there’s the blame card……blaming others for ones own ignorance. We choose everything we do…….

Ignorance is understandable when you haven’t been exposed to whatever you’re supposed to learn. If you’re 18 and can’t handle plastic money, you’re certainly ignorant. If you’re 40 and can’t handle plastic money, you’re an idiot. There’s a difference.

And as I pointed out, I could see how it wasn’t optional for some kids to take the card and open an account. It’s not like they were CHOOSING to go out and apply for one.

Sorry, but given the behavior of banks in general over the past 10 years, they’d sell their mothers for a profit. Now the Universities are pimping for them. There’s plenty of blame to go around here and I’m not tossing it all onto college kids with no real world experience. When it’s dumb 19 year old vs. financial company….what do you expect to happen?

Lil' Barry Bailout (Revised Downward)

May 30th, 2012
8:21 pm

Conservatives take out loans, just like libtards. The difference is conservatives plan on paying them off. Obozo keeps implementing ways for young moocher Democrats to default and dump their bad debt on people who work for a living.

md

May 30th, 2012
8:35 pm

“When it’s dumb 19 year old vs. financial company….what do you expect to happen?”

I would expect 19 yr olds going to college to at least know how to use google……research leads to knowledge…..knowledge leads to better decisions….

md

May 30th, 2012
8:40 pm

To be honest with you aquagirl, today’s kids have less of an excuse than prior generations……the knowledge they need to succeed in life is literally at their fingertips.

Beats the heck out of having to run to the library before closing time to look up info in the old days…

Their excuses should be quite limited……..unless they spend more time texting than researching…..

@@

May 30th, 2012
9:00 pm

Aside from her student loan for graduate school, my daughter owes me for the upgrades on her cellphone as well has her car tag. I send her an e-mail every month to collect even though she’s living with us. I always begin the e-mail with “I’m goin’ high tech on ‘ya…you owe me $XX.XX due by…(insert date here).”

“There’ll be a 15% penalty for every day you’re late.”

“Love, Mom.”

(ISH)

Tiberius - Banned from Bookman's and proud of it!

May 30th, 2012
9:00 pm

Some of the dumbest people I’ve ever met had college degrees. Wouldn’t know common sense if it bit them on the butt, but they were sure convinced they knew everything it took to get ahead.

As the old saying goes, “You can tell a man from Harvard – you just can’t tell him anything.” ;)

Hillbilly D

May 30th, 2012
9:05 pm

@@

Do you let her pay in poultry when times are hard? (IW&SH)

@@

May 30th, 2012
9:12 pm

Could this have something to do with why college students aren’t savvy when it comes to finances?

Families with teens bound for prom (high school) will spend an average of $1,078 each this year, a 33.6% increase from $807 spent in 2011, according to a survey by Visa (V: 117.49, -2.79, -2.32%).

Parents in the Northeast plan to spend the most at $1,944, while Midwest parents plan to dish out the least at $696, according to the survey. If these numbers aren’t worrisome enough, according to Visa, parents who fall in the lowest household income brackets plan to spend far more on the big night than the national average.

@@

May 30th, 2012
9:20 pm

Hillbilly:

She’s required to cook two nights a week. Her Dad hates it. She’s watching his weight. Lots of Quinoa with veggies…Asian dishes with tofu and bean sprouts.

Hillbilly D

May 30th, 2012
9:23 pm

@@

I think if I was Dad I’d just open me up a can of viennas.

JDW

May 30th, 2012
9:26 pm

@lbb…”Conservatives take out loans, just like libtards. The difference is conservatives plan on paying them of”

Pssssst…don’t tell the governor…or for that matter Kyle’s chosen one, Newt.

Dusty

May 30th, 2012
9:29 pm

Well, Atlanta isn’t perfect but it does have some very fine universities. Besides taking advantage of that, our children did not mind living at home and riding MARTA downtown. We have diplomas running out of space here and not one graduate owes any money for education. That includes the PhD and the CPA among the five.

It take some planning and effort. They did part time work in high school and various asortments of part time work, assistance ships, grants, research and back up parents after that..

If people really want a higher education, they can usually get it. I think we hear more about the students who don’t manage well and little about the ones who manage much better. Success does not make the news.

Old Timer

May 30th, 2012
9:42 pm

Great article–these kids graduate knowiing nothing about economics or business. But they can quote Shakespere. We have a lost generation, but unfortunately many think Obama is going to bail them out and will probably vote for him. A sad situation. Having been raised in the Great Depression and WWII it is hard to feel sorry for them.

Lil' Barry Bailout (Revised Downward)

May 30th, 2012
9:44 pm

Success does not make the news.
———

Nope, stories like yours don’t give the big government types the kinds of sad stories they need to take more power and more tax dollars (which they then use to buy the votes of the student moocher class).

Lil' Barry Bailout (Revised Downward)

May 30th, 2012
9:47 pm

But they can quote Shakespere.
———-

Ayers, Aulinsky, and Farrakhan, more likely.

Dusty

May 30th, 2012
9:59 pm

HAPPY DAYS ARE HERE AGAIN !!! The BRAVES just won their game against St. Louis…10 to 7. I think they are “back in the groove” again!!!

Dusty

May 30th, 2012
10:13 pm

Hey now, wait a minute…..there’s nothing wrong with knowing Shakespeare. Our family interests run to business and science (and that includes me). But I really enjoy Shakespeare. The rest of the family have little interest in literary arts. So it goes.

@@

May 30th, 2012
10:18 pm

Heeeyyyyyy!!!

My kinda Democrat…er…Republican.

Republicans on Wednesday were celebrating the defection to the GOP this week of a former Democratic congressman and close ally of President Obama, saying that it underscored their argument that the president has led the country on a march to the left.

Former Alabama congressman Artur Davis, once a rising star in the Democratic Party and the man who helped put Obama’s name in nomination for the presidency in 2008, announced his intention to switch parties and said that he will vote for Mitt Romney in November.

http://www.washingtonpost.com/politics/republicans-cheer-daviss-defection-to-gop/2012/05/30/gJQAXKpt2U_story.html

Welcome aboard!

Hillbilly D

May 30th, 2012
10:22 pm

.there’s nothing wrong with knowing Shakespeare.

It’s good fishing tackle.

@@

May 30th, 2012
10:35 pm

CLEVELAND – A longtime Cleveland waitress got the surprise of her life this week when an enormous income tax refund check arrived in the mail.

When Ginny Hopkins filed her tax return, she expected a refund of $754 — money she really needs to fix her car, among other things.

Instead of that check, she found a check mistakenly issued for $434,712 in her mailbox.

Doesn’t do much to boost my “faith” in government, but mankind?

Hopkins made arrangements Wednesday to return the check to the IRS office at the federal building in downtown Cleveland.

Since Hopkins needs the money right away, her friends at the restaurant and WKYC-TV in Cleveland advanced her the money.

Absolutely!

Dusty

May 30th, 2012
10:53 pm

Awww come on, HillBilly

“To be or not to be. That is the question.” So said Shakespeare.. It be’s not to catch a big one (but that sounds like fun to me).

I like salt water fishing. Does Shakespeare make fishing tackle for that?

Hillbilly D

May 30th, 2012
10:59 pm

Dusty

I believe they do. The real question is ” to release or to eat?”. I say get the frying pan greased up.

Dusty

May 30th, 2012
11:07 pm

Hillbilly,

Do you “grease” the pan right by the river or can you wait until you get home with the big ones?

Hillbilly D

May 30th, 2012
11:45 pm

Dusty

I’d wait ’til I was fixin’ to put the fish in the pan. Nite all.

Whatever

May 31st, 2012
2:22 am

you oldies need to just sit back in your retirement homes, we are sick of you

Dragonfly Lady

May 31st, 2012
2:57 am

I am about to turn 35. I have 2 Associates and a Bachelors Degree. I graduated with my first college degree in 1996 (AS in Nursing) and immediately began working in Pediatric Oncololgy. I did that for the next 5 years, then I made the decision to return to school and pursue a degree in Science Education. While in school I changed my major to Early Childhood Education. While in college, the first time I was concurrently enrolled in high school and caring for my cancer stricken mother, 2 siblings and my foster siblings too. I also worked to pay for school. While in school the second time I worked on the school paper, competed on debate team, carried an 18 to 24 hour course load, volunteered as a tutor for ESOL students, and did my student teaching. I also was working full time and caring for my then husband who had severe heart problems. I was on the President’s or Dean’s list the entire time.
I took out loans to help pay for school and I waited for my check. I also READ every single piece of paper before I signed anything.
I understand that I am the exception and not the rule.
I am NOT working as a teacher (the politics are too stressful) I can do more good a a community member. I work in technical support, I make better money than I did as a teacher and I am just as rewarded, with FAR less stress than when i was a nurse.
Also I competed in theater and public speaking in high school and college and was an athlete in high school and took Spanish, German and Latin as well.
I was DEAF from age 7 till 14, and I did all of that. Yeah I had a few overdrafts but I think I’ve turned out OK.

iggy

May 31st, 2012
7:42 am

For all their supposed intelligence, these “college students”, are not very bright.

m00k

May 31st, 2012
2:45 pm

Current MBA student at a school that uses HigherOne to disburse grant and student loan aid. Read a report on this yesterday and had the same reaction. Although you are required to receive your financial aid disbursements through HighOne at my institution, you are not required to use their banking services or card if you don’t want to.

Personally, I have the funds setup to immediately draft out of the HigherOne account and into my personal banking account with CapitalOne. CapitalOne does not charge me ATM fees or account maintenance fees and I actually get rewards for using my debit card or writing checks. Most of the students who are complaining are likely to lazy or stoned to put forth the minimal effort it requires to set something like this up. Or perhaps just as likely there are many parents complaining when they have to bail their kids out of these situations.

ld

May 31st, 2012
3:43 pm

The term “college-educated idiots” comes to mind. This is what we, in a textile plant where I once worked, “fondly” called one dull-witted “strawboss” [("with all the common sense of a billy-goat") -- as in, someone that would swallow just about anything].