Student ID's tied to Financial Institutions

I read most of my news online, so when I came across an article entitled, "Student banned after debit card/student ID card complaint is reinstated" I had to click.  A student at Catawba Valley Community College (Hickory, NC) was suspended after his complaint that his student ID card had to be tied to a bank.  While his complaint is unclear an the nature of how he complained is unclear, I think he has a fair point.  Why do institutions of higher education offer the "amenity" of linking student ID's to banks?  Not credit unions, banks.  Many schools do this, including Metro State (though theirs is optional, not required--you can get two types of student ID's), Texas A & M, UC Irvine, Creighton University, San Diego State University, and countless others.  These were just the top, relevant hits in my Google search of "student ID bank".  Most of their websites speak of this feature as a Bonus! or a Convenience! or a perk of some kind.

There have been numerous posts on student loan debt and what an issue it is for students to be incurring unreasonable amounts of debt to go to college and beyond.  There's even a a White House "We the People" Petition to eliminate all student loan debt in order to stimulate the U.S. economy (yeah, that is not happening, but what a great thing to wish about).  With that in mind, and with many of us rather irate at the cost of education, why are we allowing our students to incur debt AND making it incredibly easy for them to do so?  We know that banks tend to be predatory to our students, so much so that the Credit Card Act of 2009 actually began to regulate how banks and our student populations are allowed to interact.  The bill includes:

·         Credit card issuers must verify proof of income or otherwise require a co-signer before issuing a credit card to consumers under the age of 21.

·         Credit card issuers cannot send prescreened card offers to those under 21 unless they have consented to receive such offers.

·         Card issuers cannot raise a credit limit on an account for persons under 21 with a co-signer, without written permission from the co-signer.

·         Credit card issuers are prohibited from providing free items in exchange for applications when marketing to students on or near campus. The days of "credit card swag" (free t-shirts, frisbees), in exchange for credit card applications are over. Rewards programs offered with credit cards are still allowed, however.

This just makes me wonder if the Feds are so willing to regulate banking relationships with students, why the heck aren't we as institutions doing the same?  Or at least requiring some sort of financial literacy requirement prior to doing so.

Of course, in all of this there has to be some sort of benefit to the institutions, otherwise we wouldn't do it, or at least I hope not.  I would love to know what kind of money we are making off of these banks by giving them marketing right on our student ID's.  I couldn't find this information on any internet resources, but I suppose there's a good reason for keeping that information close to home.