Many times, there is an underlying reason that colleges seem so eager for students to utilize their campus cash cards, and it is not mere generosity. Simply put, there is money to be made from the deal. For example, New York University not only disperses financial aid exclusively through their swipe cards, they charge you a $2 fee to add funds on the Internet.
University swipe cards are often accepted at retail locations in the area that are not directly affiliated with the school. Vendors pay a fee for the equipment to process the cards, and in turn they get increased business from students. Critics, such as Wallet Pop's Fruzsina Eordogh, say that this in essence allows colleges to subsidize local businesses.
Cash cards can be effective for teaching students how to budget their income. In a sense, money on the card is no different than money in the wallet or the bank. However, given that many schools charge fees for reloading---or, at best, make it inconvenient to do so---there is added incentive for students to shrewdly map out their expenses before putting money on the card in order to get them through the week or month.
According to a 2006 study at the University of Maryland, it can be relatively easy to steal someone's money and identity off of a swipe card. With the right know-how, a thief only needs to invest between $20 and $240 for a reader that will enable him to achieve such a task. If theft happens frequently, it can become costly to the university to constantly replace the cards. Plus, more people may be reluctant to use the cards for funds due to negative word of mouth, and head off campus to obtain their needed resources, including food, printing needs and laundry.