At least one City Colleges of Chicago official wants to do away with the costly fees that come with student debit cards the district started using in the fall.
Ken Gotsch, the district’s finance director, says in the coming month he’ll be talking to student government representatives about the program and what they want to see changed.
“I’d like to get rid of the student fee … If we can accomplish that, that would be great,” Gotsch says.
Students can get the extra money from their tuition loans loaded onto the cards, which the district has advertised as an easier and faster method than waiting for paper checks. The extra loan money, known as a student loan refund, can be used however students choose. Often, students use the money for rent and transportation expenses.
But the debit cards, which rolled out at Kennedy-King College in Englewood last fall and then across the other six City Colleges campuses in January, carry a range of fees.
While the first withdrawal is free, every other ATM visit costs $2 and talking to a teller after the first trip is $10. The debit card program is run by JPMorgan Chase, which does not charge any of those fees for having a standard checking account. Chase officials have been unable to explain why the debit card fees are so high.
City Colleges officials have defended the fees as a convenience charge for the flexibility of being able to use the card at any Chase ATM and at thousands of stores that accept them.
In spite of the fees, the district had enrolled more than 6,300 students in the debit card program by early February. Gotsch says he'd like to see the number of students using the cards go up.
He suggested nixing the fees would be one way to make the cards a more attractive option. Students can get their loan refunds direct-deposited in an existing bank account for free, though relatively few have chosen that option.
Financial aid experts earlier this year raised questions about the legality of the debit card program. U.S. Department of Education guidelines say students should never have to pay fees to withdraw money loaded onto such cards. Education Department officials said in March the agency was reviewing the City Colleges’ program. Spokeswomen for the department have not returned repeated calls from the Daily News in recent weeks.
Gotsch says he wants to determine what changes to make to the program over the next month, in time to put them in place for the fall semester. That could include going as far as finding a different company to run the debit card program.
"(We might) possibly go out to bid and rethink the whole Chase agreement,” Gotsch says.
Daily News Staff Writer Peter Sachs covers higher education. He can be reached at 773.362.5002, ext. 18, or peter [at] chitowndailynews [dot] org.