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To: John McCarthy who wrote (93725)	9/30/2007 5:32:20 PM
From: John McCarthy	Respond to of 313060

BANKING Note: Sort of like canabalism - we EAT our young. Is it worth $35 to avoid embarrassing predicament? Some consumer advocates say universities that offer student identification cards linked to debit accounts should do more to protect students from expensive overdraft fees. Posted on Sun, Sep. 30, 2007Digg del.icio.us AIM reprint print email By MONICA HATCHER mhatcher@MiamiHerald.com Having your debit card declined at the cash register because you don't have enough money in the bank is embarrassing. But would you rather have that Starbucks coffee you just bought cost you a whopping $35 overdraft fee? Lines of credit offered to debit users for when they accidentally deplete their bank accounts prevent red faces at the register, but they're not free. Banks are pocketing big bucks from fees on overdraft credit lines: $17.5 billion a year in fees for about $15.8 billion in loans, according to an analysis of 18 months of banking transactions by the Center for Responsible Lending. Young adults between 18 and 24 account for nearly $1 billion a year of those fees, the study said, leading consumer advocates to demand changes in the law to help consumers understand how overdraft fees really work. Advocates say consumers should at least be aware their funds are dwindling before they punch in their PIN and get rapped with the penalty. Legislation being considered in Congress would require banks to notify customers before they hit the red zone and start dipping into expensive overdraft credit lines that charge an average of $34 per withdrawal. Young adults are reaching for debit cards more frequently to make everyday purchases, and the danger is they start viewing overdraft credit lines as easy short-term loans. Students, in fact, take a $3 hit for every $1 they overdraw, according to the report. ''Basically, the banks are loaning you money you don't have without telling you that you don't have it,'' said Gail Hillebrand, a senior attorney with Consumers Union. ``Would you like to pay a $30 fee for a $2 muffin at the college bookstore? Probably not, but it just goes through and you get the fee notices later.'' Alex Sanchez, who heads the Florida Bankers Association, said overdraft policies offer consumers a much appreciated safety net. They're also more affordable than writing a bad check and being forced to pay both bank and vendor penalties, he said. ''The bottom line is people shouldn't be buying things if they don't have money in their account,'' Sanchez said. CRITICS Universities are drawing criticism for teaming up with financial institutions to offer co-branded student identification cards that also carry a debit function linked to a bank account. The legislation being considered would require greater disclosure of overdraft protection plans and their better priced alternatives, as well as require banks to allow customers to opt in to the plans. Most consumers are enrolled by default. Leslie Parrish, a senior researcher at CRL, said universities aren't necessarily to blame for the tactics, but could do a better job of working with banks to draw up less punitive policies for students. ''While a university may not be endorsing one checking account over another, if they have it on their university identification, they're really sending a message to students that it is a very convenient way to do their banking,'' Parrish said. Hillebrand said schools could help by working with the banks to cut students off at the point of sale before they could overspend. They could also negotiate better overdraft terms with banks that want to market to students by, perhaps, making the overdraft fee equivalent to the overdrawn amount. ''That would take the profit out of inducing people to overdraft their accounts for $2,'' Hillebrand said. Universities have increasingly partnered with banks to provide debit cards rolled into student ID cards. AT FSU Florida State University, for example, has offered students an all-inclusive student ID card since about 1995. It functions as a library card, dorm key, laundry and vending machine card, and SunTrust Banks banking card. Paul Strouts, associate vice president for administration at FSU, said it was popular among students because it allowed them to transfer money from financial aid directly into their bank accounts, speeding the process and lowering costs for both students and the university. He said SunTrust charges a $35 overdraft fee, but the bank informs students of other ways to link overdraft protection to savings or credit-card accounts with lower interest rates. miamiherald.com

To: John McCarthy who wrote (93725)	9/30/2007 5:51:35 PM
From: Cogito Ergo Sum	Read Replies (2) \| Respond to of 313060

When I got married 2 some years ago, my wife was still carrying a 23K student loan and I had a 1600$ student loan outstanding . In the first five years of marriage we paid off the loans and bought our first house (only 5% down). Granted it was the onset of 80s housing bubble up here before prices went wonky.. Should a student expect to be able to pay off their loan and buy a house right out of school ? The example of Law school, is that two degrees ?