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In 2022, a report on banking and credit card agreements by the Consumer Financial Protection Bureau described the high fees charged on student banking products endorsed by colleges. The report made clear that financial institutions and colleges may be steering students into expensive financial products.

Now, a new report by the CFPB shows that many colleges continue to employ marketing strategies that may mislead students into accepting products that may not be the best choice for them. Among the student risks identified in the new study:

  • Colleges’ financial product partners may charge students high or atypical fees: Although most of the largest banks have moved away from charging overdraft and non-sufficient funds fees in recent years, some of the sponsored deposit accounts in the report do charge students those fees. Thus, students who follow their school’s advice may be steered into accounts that cost them much more than what they would pay in the open market.
  • Fees paid by students often vary by institution type: The average fee burden varies by the type of institution. The report finds that accountholders at Historically Black Colleges and Universities (HBCUs), for-profit colleges, and Hispanic-Serving Institutions (HSIs) all pay higher-than-average fees per account.
  • Students face unexpected fees at graduation: Some financial institutions impose additional fees when a student graduates or reaches a certain age, relying on “sunset” clauses in the products’ terms and conditions. Students who sign up for a product marketed as free may thus end up being charged monthly maintenance fees, or overdraft and NSF fees they did not anticipate.