More wolves preying on college students

As if they weren't already forking over enough to pay for their education, college students are also being pressed to use costly debit cards and pay hefty fees to middlemen to get their financial aid.

As many as 900 colleges have been pushing students into using payment cards that carry stiff costs, according to the U.S. Public Interest Research Group Higher Education Fund.

The group said in a report that colleges and banks have been raking in millions of dollars from the fees, often through secretive deals. The practice may violate federal law, the group said.

In the past, the bulk of student aid was distributed without fees and without the greedy middlemen who are pocketing millions to distribute the payments. Now, more than two out of five college students, roughly nine million people, attend schools that have questionable deals with financial companies.

The arrangement is a win-win for the schools and lending programs such as Higher One, which no longer have to print and mail checks. They have instead shifted the cost of distributing financial aid to the students.

Some schools have been making out like bandits by giving lenders exclusive access to their students. Ohio State University gets $25 million from its contract with Huntington Bank, while Florida State University receives a cut of every ATM fee a student pays.

Exactly how much money schools are making off the sweet deals is not clear because many refuse to release the details of their contracts with banks. The agreements should be released to provide full transparency.

It has become clear that some students were falsely told that the payment-card arrangement would provide a faster and cheaper way to get their student aid. It's not cheaper after you have been socked with fees for everything from requesting a replacement card to using the cards as all-purpose debit cards.

Other outrageous fees charged by Higher One included $50 for an account overdrawn for more than 45 days; $10 monthly, if an account is inactive for six months; and 50 cents to use a personal identification number or PIN.

Students can opt out and choose to get their aid through direct deposit or using paper checks, but those methods take longer, and few cash-strapped students want to delay getting their money.

In 2010, Congress eliminated the expensive middleman role played by lenders of federally guaranteed student loans by having the government disburse its loans directly. Congress should require the colleges to do the same thing and get rid of the unreasonable fees charged by middlemen. Students are struggling enough to pay for a college education as it is.