Released: January 25, 2018
Questions about student aid debit card
The prepaid card is one of several new initiatives pushed by A. Wayne Johnson, who became FSA's chief last fall. Johnson has promised that the card, which is essentially a debit card for student aid funds, would allow the Education Department to add better customer service and help students understand the implications of their spending and how it affects their student loan debt. Combined with a new mobile app the department is developing, students would get proactive reminders about spending and account balances.
But some consumer advocates say Federal Student Aid’s ambitions to occupy functions of a traditional bank go beyond its mandate. They also are troubled by the potential for student data to be marketed to private entities or for FSA to restrict where students spend their federal aid money.
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