"A proposed payment card with financial aid money on it wouldn’t stop college students from using it on liquor or a tattoo, the Education Department’s head of federal student aid said. Still, steps would be taken to try to ensure taxpayers’ money is used responsibly, the Office of Federal Student Aid’s Chief Operating Officer A. Wayne Johnson told Bloomberg Government Jan. 23," Bloomberg BNA reports.
"The card is part of a larger app the office is working on to build 'long-term, engaged communication relationship' with millions of borrowers holding $1.3 trillion in federal student debt, Johnson said.
Senate Democrats, financial aid administrators and higher education advocates are concerned how the office would use and protect student data from the cards. Johnson cast the program as a way to provide financial counseling to students.
Johnson said that if students had a card with refunded tuition dollars, an app on their smartphone would track their purchases. If a student was making a purchase at a tattoo parlor or a liquor store, the app would send the student a notification asking if he or she was sure of using the funds that way.
According to a draft contract solicitation involving the card, the Education Department is seeking the capability to limit where the cards could be used. Johnson, though, characterized the technology as safeguards against misuse of stolen or lost cards, not restrictions on where the rightful cardholders could shop.
...What is responsible spending can be difficult to determine, said Justin Draeger, president of the National Association of Student Financial Aid Administrators. Draeger said he supports the program, but isn’t convinced students blowing financial aid on tattoos and trips to Cancun is a widespread issue."
NASFAA's "Headlines" section highlights media coverage of financial aid to help members stay up to date with the latest news. Inclusion in Today's News does not imply endorsement of the material or guarantee the accuracy of information presented.
Publication Date: 1/26/2018