DOE Issues Proposed Rulemaking for Student Cards (May 18, 2015)
The Department of Education last week issued a proposed rule modifying the cash management regulations of the Higher Education Act of 1965. The proposed rule includes numerous provisions applying to checking and prepaid card accounts established by colleges or universities on behalf of students or parents for disbursing financial aid.
The proposed rule seeks to impose new and modified disclosure and consent obligations, new requirements for publicly posting agreements between colleges or universities and the financial institutions with which they’re contracting and, in some cases, limits on the kind of fees accountholders may be charged.
Comments are due within 45 days of the proposed rule’s publication in the Federal Register. The DOE is particularly looking for comments on whether it should take more proscriptive actions to prevent abusive marketing practices with respect to student cards.