Credit unions that issue debit and prepaid cards to college students receiving financial aid could soon find themselves answering to new rules from the Department of Education, the agency announced.

Under regulations made available for public comment on Friday, higher-education institutions would not be allowed to require students to deposit their financial aid dollars in accounts with specific financial institutions. The rules would also prohibit charging overdraft fees if students select accounts offered directly or indirectly by contractors that help schools disburse federal student aid. "Reasonable access" to surcharge-free ATMs and fee-free access to financial aid funds for a 30-day period would also be required.

The rule would establish two types of arrangements between schools and financial institutions: T1 arrangements, which are agreements to process federal aid on behalf of the school, and T2 arrangements, which involve agreements to market those accounts directly to students and their parents.