Student Borrower Protection Center and U.S. PIRG Education Fund Spotlight Devastating Effects of Junk Fees

Media Contacts
Ed Mierzwinski

Senior Director, Federal Consumer Program, U.S. PIRG Education Fund

WASHINGTON, DC — Today, in response to the Consumer Financial Protection Bureau’s (CFPB) request for information (RFI) on harmful “junk fees,” the Student Borrower Protection Center (SBPC) and the U.S. PIRG Education Fund submitted comments exposing how financial service giants and universities are plaguing postsecondary students with unexpected, unavoidable, and hugely expensive charges on a range of financial products. As the advocates’ comments detail, offerings from school-sponsored prepaid and debit cards to various forms of “shadow” student debt are loaded with overdraft fees, insufficient fund fees, late fees, and a maze of other hugely harmful costs. In addition, the advocates’ comments illustrate how junk fees that are common across the consumer banking space—such as overdraft fees—cause particularly acute financial distress for students.

The SBPC and the U.S. PIRG Education Fund are calling on the CFPB to use its broad authorities over enforcement, supervision, and regulation in the consumer financial services marketplace to investigate and eradicate junk fees. In addition, the advocates are urging the Bureau to hold companies that rely on junk fees accountable for decades of associated harms.

Read the full comments here.

“While students see college as an avenue toward opportunity, consumer finance companies clearly view students as walking dollar signs—and junk fees are these firms’ tool of choice,” said Mike Pierce, executive director of the SBPC. “The nation’s top consumer watchdog should use every authority at its disposal to shield students from these unfair charges and to hold bad actors to account for their predatory conduct.”

“We know students are being crushed by student loan debt and high textbook costs—but we’ve also been concerned for over 30 years about the added burdens caused by campus junk fees,” said Ed Mierzwinski, senior director for federal consumer programs at U.S. PIRG Education Fund. “Financial institutions have turned hidden fees and inexplicable, unfair charges into a core aspect of their business model. It’s time for policymakers and law enforcement to do something about it.”

As the CFPB noted in its RFI, the economy in general and the financial services industry in particular are increasingly dependent on exploitatively structured fee-based revenue that shields market participants from competition. This trend is particularly troubling in terms of its effects on postsecondary students, who have long been the target of fee-driven profiteering aimed at lining corporate executives’ pockets. 

Today’s comments from the SBPC and the U.S. PIRG Education Fund call attention to the following ways that consumer finance companies’ junk fees hurt students:

  • Banks continue profiting by imposing predatory junk fees on college-sponsored financial products, all while schools cash in and regulators turn a blind eye. 
  • Companies in the opaque “shadow” student debt market trap borrowers with junk fees at every step in the student loan lifecycle. 
  • Overdraft charges and other junk fees endemic to consumer banking are particularly harmful for students. 


About the Student Borrower Protection Center

The Student Borrower Protection Center is a nonprofit organization focused on alleviating the burden of student debt for millions of Americans. The SBPC engages in advocacy, policymaking, and litigation strategy to rein in industry abuses, protect borrowers’ rights, and advance economic opportunity for the next generation of students.

Learn more at or follow SBPC on Twitter @theSBPC.

About the U.S. PIRG Education Fund

U.S. PIRG Education Fund is an independent, non-partisan group that works for consumers and the public interest. Through research, public education and outreach, we serve as counterweights to the influence of powerful special interests that threaten our health, safety or well-being. SInce 1998, U.S. PIRG Education Fund has produced a series of reports on how students and other young people are affected by campus credit and debit card marketing and other relationships between campuses and banks and other financial firms.