TEMPE - Arizona State University is drawing criticism over a campus debit card deal that will mean millions of dollars going into the school's coffers over the next decade.
ASU officials say students will benefit from the 11-year agreement in which Oklahoma City-based MidFirst Bank provides student identification cards that also serve as debit cards.
Consumer groups are questioning whether students are being manipulated into choosing a bank that benefits the university, The Arizona Republic reports.
ASU says students will not have to deal with ATM fees. Students can also choose an ID card without the debit card feature.
The university will receive $15 for each new student banking account, another $2.50 a year thereafter while the student attends ASU, and 4 cents every time a card is swiped.
The contract guarantees the school will rake in at least $3.5 million over the life of the deal.
The deal also gives ASU a $1 million signing bonus. Under the contract, the school must make a reasonable effort to promote and support the program. ASU has informed incoming freshmen through email and in writing about the ID-debit card combination.
A recent study on campus debit cards done by Rich Williams, a federal higher-education advocate for the U.S. Public Interest Research Group, found 32 of the nation's 50 largest public universities have similar agreements to provide debit cards linked to prepaid cards.
Williams said some contracts led to students paying high overdraft fees. He said some campuses seemed to be endorsing the bank through its advertising.
Northern Arizona University does not offer a combined ID and debit card, and has no plans to, a spokesman said.
THE LOCAL ANGLE
The University of Arizona is renegotiating a deal with Wells Fargo & Co. to continue offering a combined student ID and debit card. UA has had the agreement with the bank for several years. The university earned about $29,013 from the partnership this fiscal year.
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