The university told ABC News the TCF Bank account is "one of the best banking options available to students," but that students are welcome to look elsewhere. But Miller said most are easily persuaded to sign up with the financial institution that calls itself the school's "official bank." He said records show 85 percent of incoming freshmen at University of Minnesota are signing up for TCF Bank accounts.
"People have an attachment to their university," Miller said. "And the university is using that to persuade these students to engage in this practice whether or not it's to the benefit of the students."
Both TCF Bank and the University of Minnesota say they are offering students one of the best deals available. Miller said he has seen comparisons suggesting that students may find better options online, or through a credit union. A major distinction relates to overdraft fees. The TCF Bank account charges students $37 each time they swipe their debit card and try to spend more money than they have in their account.
Mike Schmit, 21, the student body president at University of Minnesota, said his close friend suffered that fate when there was a mistake with his paycheck and he accidentally overdrew his account.
"He went and he spent some money on books … and went below the zero mark," Schmit said. "He had four or five transactions after that and for every additional transaction under that $0 mark, it was a $37 fee, which was obviously tough for him."
"We're all college students," he said. "We do the student way with eggs and ramen and all that. And for somebody who's already having a difficult time paying for rent and paying for books, that can be difficult. Thirty-seven dollars, that's substantial for a lot of students. It really is."
According to the FDIC, 50 percent of young adults over-draw their accounts each year and those who do over-commit their funds, do so on average seven times. A study by the Pew Charitable Trusts indicates that inexperienced banking customers are likely to exceed their balance as often as twice a month.
Jason Korstange, the director of corporate communications for TCF Financial Corporation, said that is not the bank's experience with University of Minnesota students.
"Our student account holders overdraft less than twice a year, not twice a month," Korstange said. "The overwhelming majority don't overdraft at all."
Officials at the University of Minnesota were reluctant to answer questions about the school's contract with TCF Bank, but provided ABC News with a statement defending the school's wide ranging arrangement with TCF Bank.
"The University of Minnesota shares the concern of ABC News and policymakers that there may be existing questionable practices by some financial institutions that adversely affect students," the statement says. "In such cases, the University supports policymakers who want to do what's best for students. We share that goal and our contracts and policies reflect these values. While there may be some existing business arrangements across the country that negatively affect students, the U of M's relationship with TCF Bank is not one of them."
"Our current arrangement allows students to make their own choices about banking, provides students convenience and abides by state and federal laws that protect student consumers," it says.