In addition to shelling out tens of thousands of dollars each year toward financing their education, college students are also falling victim to large amounts of bank account-related fees each year, which can really add up.
A new study conducted by the Consumer Financial Protection Bureau found that college students paid more than $27 million dollars in bank account-related fees last year. The actual number paid is likely to be higher than that estimate, since all of the nation’s colleges were not surveyed in the study.
For many students, going away to college also includes opening up a bank account for the first time, as students need a mechanism to hold and disperse money. While some students may be smart and do their homework, others may be lured by the promise of free giveaways or catchy slogans, without failing to read the fine print that includes fees associated with the account. One estimate from a Wells Fargo account included fees of approximately $48 dollars over a 12-month period.
According to the study, banks are often keen to develop deals with local colleges in their proximity, where they can recruit large numbers of new customers for debit and checking accounts. Striking a deal with a college can bring prime advertising space at student activity fairs on campus, which can make it easier for students to sign up for an account.
However, these fees can often be avoided by researching various available banking accounts offered by local banks. For example, many banks offer some form of student checking, which waives any associated fees with the account provided that students provide college ID and keep a required minimum balance in the account at all times. Other accounts may also be willing to waive fees if students link direct deposit payments from part-time jobs they may hold while going to school.
It is also important for students to find a bank with ATM locations close to campus. While the ease of using an ATM inside a bar or grocery store may be tempting, the costs associated with a $6 ATM surcharge from an unaffiliated vendor can really add up over time.
Even though it can be difficult to avoid certain kinds of student debt associated with getting an education, millennials would be wise to research their banking options carefully, as saving those bank-related fees can go a long way.
John Patrick (@john_pat_rick) is a graduate of Canisius College and Georgia Southern University. He interned for Red Alert Politics during the summer of 2012 and has continued to contribute regularly.
