How students helped shape the banking agreement

Two of the Berkeley students who played a key role in shaping the campus’s agreement with Bank of the West are undergraduates Anthony Abril and Raj Bhargava. The pair sat down recently with Berkeley News to talk about students’ stake in the relationship and their own role in the process.

Anthony Abril and Raj Bhargava

Anthony Abril and Raj Bhargava (UC Berkeley photo)

Berkeley News: As you considered a potential banking agreement for Berkeley, what did you learn by looking at the experiences of other campuses?

Abril:  We saw it was important to ensure that students were involved in a transparent process, and also that the bank play a really active role in answering student needs. At some schools, banks have come on campus in a way the student body received very negatively — where students were receiving promotional materials about deals and programs. These are things we tried proactively, from the beginning, to root out of this agreement.

What were students’ main concerns?

Abril:  There’s a general uneasiness about corporate partnerships and reliance on private entities. We’re a public space and students need to feel comfortable in that space, without feeling they’re being marketed to by any private company. They don’t want financial services pressuring them or offering incentives to steer them in any particular direction.

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Bhargava:  Students are wary of predatory practices. In some other deals between universities and banks, a portion of the money coming to those universities is tied to opening accounts for students; there’s a quota that campuses have to meet. We wanted to ensure that that didn’t happen — that students have equal opportunity and equal access to any financial service they choose.

We also wanted to make sure that students would not be required to maintain a minimum balance in accounts they might choose to set up with the official bank; that the bank wouldn’t directly market credit cards to students; and that if students choose to borrow through a credit card offered by the bank, it would be at a low interest rate. We wanted the agreement to benefit students and we succeeded.

Financial literacy education was one of the benefits for which students lobbied. What does financial literacy mean to you?

Bhargava: Knowing one’s options. Knowing what student debt means, what it adds up to, what those APR numbers mean on a credit card contract. Knowing one’s options through the financial aid and scholarships office and having a larger knowledge of financial service providers and financial products and of special benefits we may be able to access, just by virtue of being students.

So students want more opportunities for financial education on campus?

Abril: There’s an active effort from the financial aid office — both here at Berkeley and at the UC systemwide level — to make sure students know their options and make good borrowing decisions for financing their education. UC is lower than the national average in terms of student borrowing — both the percentage of students who borrow and their cumulative debt when they graduate.

Berkeley’s financial aid office is looking to expand its peer-to-peer financial literacy program, which is staffed by paid students and coordinated by a full-time staff member. And it’s looking to create an online training program, which can reach additional students. The financial literacy program is relatively new and it’s looking to grow. We want to help them grow.

What other needs did students identify?

Abril:  One growing concern on the campus is food security. We’ve done a survey at Berkeley — across the UC system, actually — which points to the fact that some students are skipping meals to pay for all their student expenses, and these students aren’t eating in nutritious ways. This relationship presents a great way to address that need.

In what way?

Bhargava: The bank will provide funding for a new food voucher program, which is still in the works. We’re looking to partner with local restaurants, maybe some local produce providers, our campus dining commons, to provide food for students at a reduced price. If staff at the UC Berkeley Food Pantry notice that a student has been coming in often, or has some extra need, they’ll be able to provide food vouchers to help the student get a nutritious meal and save them time and energy needed for other things, like working. We hope we’ll be able to reach a large portion of the students who are food-insecure.

You also lobbied for student internships at the bank. What will that look like?

Bhargava: There will be two paid internships a year, in San Francisco, for nine to 10 weeks over the summer. One will be working with the bank on partnerships such as this one; that will be a unique way for students to get involved. We’re still hashing out details on the second internship. We’re looking to have one internship the first year, and then two internships each year for the remaining nine years of the agreement.

Student internships at banks are often filled by business students or ones with explicit prior knowledge of the financial industry. We wanted to make this opportunity available to students from many different majors, and students who might not know much about what banking institutions are involved in, and where there might be opportunities to intern.

What have you learned from working on this project?

Abril:  We’ve seen the value of different perspectives coming to play. Raj and I, for example, both worked with campus food security issues before getting involved in this process — which definitely influenced our understanding of student needs. And the graduate student perspective was vital. Most graduate students are in a different position than undergrads in terms of the financial services they need.

What comes next for you, in terms of this process?

Bhargava: We’re going to facilitate the transition for the bank and campus partners. In terms of the on-campus bank we’re creating, we want this branch to help members of the UC Berkeley community who are least likely to use financial service products or to know about the industry. So we’re looking to utilize this branch to help our low-income students, staff and faculty.

Abril:  As this is going to be a 10-year relationship, there’s going to be an oversight team from the campus, which will continue to monitor progress. We want to ensure that there’s always a student representative on that team — someone students can go to with questions or concerns. We want the spirit in which we’ve shaped the agreement to continue into the future.