Students across the country are paying millions of dollars in account fees to banks that have struck marketing deals with colleges and universities.
That’s according to a recently released study conducted by the Consumer Financial Protection Bureau showing students collectively paid $27.6 million in fees on deposit and prepaid accounts between July 1, 2016, and June 30, 2017.
The study identified 573 colleges with marketing agreements with banks that have reported complete details of their marketing arrangements, including information on fees paid by account holders using sponsored accounts.
The analysis shows that roughly 1.32 million students attending these colleges identified in this study had open and active accounts with their college’s account provider during the 2016-2017 academic year.
Fourteen companies including large and small banks, specialty nonbank providers and credit unions provided sponsored accounts to these students during this period.
Wells Fargo charged the highest fee on average to student account holders, at nearly $47. The banking giant has more than 300,000 active student accounts, according to the study. Some banks in the study, however, charged very little to open accounts.
Fifth-Third Bank did not charge fees and Student Federal Credit Union charged just $2.
PNC Bank paid the most in compensation to colleges at over $7.5 million, while the next closest bank in the study, U.S. Bank, paid roughly $3.17 million.
A number of banks and companies including BankMobile, BlackBoard, Financial Payments LP, Tuition Management Systems, ECSI/Touchnet and Student Federal Credit Unions did not pay any compensation to colleges.
On the whole, the study found that a majority of students paid no fees when using sponsored accounts at most colleges. However, the data also indicates that a subset of student account holders pay a disproportionate share of the total fees paid by account holders at a given college.
