Young Americans are disproportionately disconnected from the financial mainstream. The share of Americans ages 15 to 24 without bank accounts is double the national average, and they are often more likely to use high-cost or predatory financial products. As such, early bad experiences in the financial marketplace can have consequences over a young person’s lifetime.
The financial products offered to college students have long been problematic. The Credit Card Accountability Responsibility and Disclosure Act, or Credit CARD Act, of 2009 largely addressed abusive credit card marketing partnerships on college campuses that led students to take out cards even though they often were unable to pay back the debt. Now, the Department of Education proposes to take student consumer protections one step further by cracking down on abusive banking products tied to accessing student aid funds, making sure that student accounts are not gobbled up by fees.
For more on this idea, please see: