ATMs in high schools -- good idea, but watch out for fees
By Laura Bruce • Bankrate.com

ATMs may someday be as commonplace in high schools as the ubiquitous trophy case. Western states such as California, Oregon and Washington seem to be leading the way when it comes to installing cash machines on the teenage education front.

Apparently, some schools opted for ATMs after too many parents bounced checks.

"We were receiving close to $2,500 a semester in bad checks that turned out to be almost uncollectible," says Jeff Meredith, Spanish teacher and director of student activities at Grossmont High School in El Cajon, Calif.

"We were losing way too much money, so we went to a policy of cash only. I thought we should at least give them an option, so we installed an ATM."

A similar situation pushed officials at West Hills High School in Santee, Calif., to go the ATM route, according to finance technician Kris Husseman.

"We stopped taking checks last fall because so many were bouncing. Students were bringing in checks for registration, student discount tickets, books, everything."

Convenient, but costly
Putting an end to bad checks isn't the only benefit of ATMs; the machines have also added a large measure of convenience and safety.

"It's made a big difference," Husseman notes. "It helps at registration because parents don't want to send cash with their kids to school, so they can send a debit card."

Jeff Meredith says that $5,000 was withdrawn from his school's ATM during a three-day registration period.

"Normally, it's not anything like that. We usually get about 10 hits a day, but it's steadily increasing. I had a kid in class today who wanted to buy a yearbook and asked if he could call his dad and have him transfer money to his account."

But convenience comes with a price. Withdrawal fees at most schools range from $1 to $1.50, a very hefty sum considering kids are often taking out small amounts.

Both Grossmont and West Hills High School charge $1.50 with $1.25 going to the school and 25 cents toward maintenance. The schools use their portion of the fee to pay for the machines; when it's paid off the money will go to student activities.

"I've never had one student complain about the fee," Meredith says. "I didn't want it to be more than at 7-Eleven, but I think $1.50 for an ATM transaction is very reasonable."

No complaints
You have to wonder if students aren't complaining about fees because parents are funding their accounts or, if it is the kids' money, perhaps they're just not aware of the high price they're paying for that quick $20. Certainly some teenagers have their own bank account funded by money they've earned, and they might be very conservative when it comes to withdrawals. But other kids need guidance.

"Add up those fees over weeks and months and in the course of a year they could be paying hundreds of dollars," says Rudy Cavazos of Houston-based Money Management International, a debt counseling agency.

"With every financial convenience we have, there needs to be some education supporting it. If you put an ATM in the school hallway, it's the responsibility of the school or the school board to educate students on what options they have; educate them on proper money management."

A stand-alone ATM in a high school can be a money management tool if parents keep tabs on how their children are using it, insist on them sticking to a weekly budget and don't just keep pumping money into the account.