Quick Cash on Campus Worries Some Parents

EL CAJON, Calif. —  Tired of having parents turn in checks that bounce, Grossmont High School officials did something few other schools have dared to try.

They adopted a no-checks policy and installed an automated teller machine on the outside wall of the old gym, right next to the school finance office.

Now, students hungry for dollars to buy dance tickets, yearbooks or just about anything are excited to have somewhere to go for quick cash. Less thrilled are parents, who wonder whether teenagers can handle the responsibility.

Grossmont High is not alone. Nearby West Hills High School installed an ATM last week. And a third San Diego County high school is considering purchasing a machine this fall.

Industry watchers say ATMs -- already common at college campuses -- could quickly become a trend on high school grounds, as providers look for new places to expand the market.

“Convenience stores and gas stations already have them, so all the logical places are relatively full,” said Ann All, editor of the online trade publication ATMmarketplace.com. “High schools are a very nice, largely untapped market niche.”

The machines are also a way for schools to raise funds. Grossmont High School paid about $10,000 for the ATM, but will receive $1.25 of the $1.50 service fee on every transaction. And after the machine is paid for, the student body can spend the profits on the school. Though the machines were designed for parents, teenagers are expected to do their share of banking -- and spending.

Nationwide, teenagers are expected to spend $176 billion this year, compared with $141 billion five years ago, according to Teen Research Unlimited.

“Everybody knows that teens have disposable incomes, so it sort of makes sense,” said Rob Callender, senior trends manager for the Illinois-based research group.

One-fifth of teenagers have debit cards, with older teens even more likely to have them, Callender said. Only 4% of students 12 to 15 years old have cards, compared with 57% of 18- and 19-year-olds. He added that debit cards can be educational tools because teenagers are less likely to get into large credit card debt with debit cards.

The decision to buy a cash machine at Grossmont High School started with the bounced checks. The school received more than $2,000 in bad checks last year, including $360 from one family, finance technician Sue Honeycutt said. Despite repeated letters and phone calls, Honeycutt was unable to recover the bulk of the money from about 40 of the checks. So the school decided to refuse personal checks for school supplies and events and to accept only cash or money orders.

Then, to make it easier for parents to pay, the Associated Student Body voted to purchase a machine. Principal Theresa Kemper said the machine is primarily a convenience for parents, staff members and students but is also a way to bring the community into the school. To prevent security problems, the school decided to limit banking hours to between 7 a.m. and 3:30 p.m. At the end of the school day, Honeycutt removes the money and takes the machine offline. A surveillance camera also monitors the machine.

Even so, some teachers said they worry about students’ safety. “If they are withdrawing a large amount of money, it puts them at a higher risk,” said English teacher Heather Spross.

Larry Stanton, who sold the machine to Grossmont, said that even though campuses have a built-in clientele, he doesn’t anticipate a large number of transactions. “We’ll watch it and see how schools do,” he said.

The head of the ATM Industry Assn., Lyle Elias, said he also plans to pay attention to the school machines. Since the ATM was installed at Grossmont in the middle of August, there have been nearly 80 transactions and about $6,000 has been dispensed, said Stanton of Cash Systems in Studio City. About $4,200 of that was withdrawn on the first day of registration.

During the first week of school, the students said they were excited about the teller machine.

“We were all kind of surprised.... We never expected an ATM at school,” said Jamie Crooks, 16, who has his own debit card and plans to use the machine when he needs cash. When asked how much money he had in his account, Crooks laughed and said, “$20.”

Noelle Schlotman, 17, has a job at Taco Bell and a joint bank account with her mother. She said the machine is handy because she doesn’t have to go to a gas station anymore to withdraw cash. “It is kind of weird at school though,” she said.

Debra Sesma said she thinks the machine is a bad idea and she has no intention of getting her 15-year-old daughter a debit card. “Let’s face it,” she said, “adults can’t even take care of their money. Teenagers can’t either. High school is not the time to be experimenting with ATMs.”

Another parent, Theressa Ryles, said she believes that teenagers won’t gain an appreciation for money if they can withdraw cash at school whenever they want. “They need to learn that money doesn’t just grow on trees,” she said. Ryles said she doesn’t want her teenage children to have debit cards but she isn’t comfortable with the alternative either: sending them to school with bundles of cash to make school purchases.

Standing behind his mother, 16-year-old Cliff said he planned to convince his mother to get him a debit card. “I’m gonna get one,” he said.