It’s been almost a year since City Colleges students started getting hosed with fees when the tried to get their student loan refunds off of special debit cards.

Now it turns out that amid months of back and forth with the U.S. Department of Education over whether the fees were legal … JPMorgan Chase hasn’t been slapping the fees on students since February, City Colleges Treasurer Dolores Javier told us last week.

“The fees are just those ATM withdrawal fees or the teller fees, those are the only fees that are in question,” she says.

Under the Education Department’s rules, banks can charge fees for things like replacing a lost card or not using the card for several months. Those types of fees will remain with the Chase program.

That’s good news for students, who had been in an uproar about the program because of the fees just to get their money in the first place.

Here's the background, in case your fantasy baseball league has been sapping all your attention: Chase runs a program that loads the refunds onto debit cards. The refunds are the student financial aid money that’s left over after paying for tuition and books. Students count on it for things like rent, groceries and gas.

But as the Daily News started reporting last November (seriously? this has been going on for 10 months?), Chase was socking students with fees to make withdrawals from an ATM ($2) and to talk with a teller ($10). The Department of Education spent several months reviewing the program, deciding in May that it was acceptable, but then reversing itself in July, labeling the program a violation of its rules. 

So yes, all that flip-flopping was moot since the fees had been suspended right about the time the Education Department started looking. But at least it was refreshing to see the government stand up for the students.

Chase had said earlier this summer that it would stop running the program after this semester, but reversed itself last month, with little explanation to the City Colleges, and will keep offering the cards as long as the district keeps it around.

“What’s interesting is we don’t know why they changed their mind,” Gotsch says.

Even still, the district is starting to collect bids from other banks that might want to offer the debit cards. Students would not pay withdrawal fees under any program, Gotsch and Javier say. The bank the district picks would make its money by charging the City Colleges a fee for the service, so the district is now looking to see who will make the best deal with it.

“We have a bid out on the street,” Gotsch says. ‘We plan on continuing the bid and we’ll make a selection this fall.”

About two thirds of City Colleges students who get student loan refunds are now using the Chase debit cards, according to data from the district. Between October 2008 and August, nearly 8,200 students signed up for the debit cards. Another 4,500 opted to have the refunds direct-deposited into their bank accounts.