Thu, Mar 20, 2008 (2:03 a.m.)

College students have long depended on their student identification cards for library services and access to school functions and buildings.

But as USA Today reports, an increasing number of universities are encouraging students to use IDs that also double as bank debit cards. The banks, in turn, pay the universities a fee each time a student makes a transaction. In some cases, banks’ payments are based on how much money students keep in their accounts.

USA Today reports that 127 schools had student ID-debit card deals with banks last year, a 122 percent increase over 2006.

The problem, critics say, is that these banks don’t always offer students the best banking deal for their money. But students open accounts because the universities promote them.

A spokesman for the Center for Responsible Lending, a consumer advocacy group, told USA Today that many of the banks also charge hefty fees, rather than rejecting debit transactions, when students don’t have enough money in their accounts to cover purchases. This unfairly preys on a vulnerable population of young adults who typically have little money and limited experience in managing their finances.

And the debit cards can be hard to refuse. At Oregon’s Portland State University, for example, students who want an ID card that is not linked to a bank account must pay $20.

Such practices have raised the suspicions of officials in a handful of states, USA Today reports just as the relationships between universities and student loan companies did last year.

Congress cracked down on the student lending industry after learning that a significant number of universities received financial perks from student loan companies by referring students to those companies.

The emerging relationships between banks and universities don’t sound much better.

Although we can appreciate that universities are struggling for adequate funding, preying on students’ trust and steering them toward specific banks is just wrong.