Higher One to Repay $55 Million in Campus Banking Fees to Students

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We support reforms to the financial marketplace that protect consumers from unscrupulous banks and lenders.

By Suzanne Martindale on Monday, January 4th, 2016

Talk about a holiday miracle!  The New York Times recently reported that two federal agencies are ordering Higher One, the largest provider of financial aid services on college campuses, to give refunds to students who used Higher One’s campus accounts and paid deceptive fees.  According to the Federal Reserve and the FDIC, Higher One didn’t inform students about some of the fees and features associated with their accounts.  The company also used school logos on their materials to make it look like their colleges endorsed the accounts.

The Federal Reserve is seeking $24 million worth of repayment to about 570,000 students, while the FDIC ordered Higher One and its partner bank, WEX Bank, to return $31 million to 900,000 consumers.

Over the past few years, we’ve told you about how schools have increasingly entered into arrangements with financial institutions to disburse financial aid dollars, as well as market banking and prepaid accounts to students.  These school-bank partnerships have helped schools cut costs, but also expose students to aggressive marketing tactics, high or unusual fees, and restricted choices for managing their money.  Our Consumer Reports investigation in 2014 found that some of these accounts came with fees that added up quickly if you used them frequently, and also found that important information about the accounts was often difficult to find.

All that is about to change starting this year. New Department of Education rules, which we helped negotiate, will provide a number of important protections to students banking on campus:

  • Set minimum requirementsfor accounts opened during the financial aid disbursement selection process, as well as those directly marketed to students;
  • Require a neutral menu of options for students choosing how to receive their financial aid disbursement, with direct deposit to an existing account displayed prominently as the first option;
  • Require affirmative consent from a student or parent to open a campus account before mailing an access device associated with the account, or linking a student’s ID card to the account;
  • Require meaningful access to free ATMs for campus accounts;
  • Ban point-of-sale and overdraft fees on certain accounts, and requires banks to enable students to access their funds at any time without a fee through at least one method (for example by making a withdrawal at a bank branch or getting a lump sum check); and
  • Require public disclosure of campus banking contracts, including prominent posting on school websites as well as submission to a centralized database.

2016 is shaping up to be a better school year already.

One response to “Higher One to Repay $55 Million in Campus Banking Fees to Students”

  1. m surprised higher one doesnt buy all the one blood mobiles they ask for everything they can get down to RAMON NOODLE MONEY from DOCUMENTS TO VERIFY IDENTITY SO THEY CAN PROBABLY STEAL MORE MONEY TO SCHOOL REFUNDS HOLDS TO COLLECT INTEREST RATE MATURITY WHILE THEY FUNNEL OUTSOURCED PAYROLLS THAT PROBABLY HAVE TERRORIST LINKS I SENT THEM ALMOST EVERY PIECE OF PAPER I HAD THAT CONNECTED MY IDENTITY THEY ARENT EVEN WORTH VENTING ABOUT ID RATHER OPT TO CLOSE ACCOUNT AND WAIT TWO FULL MONTHS TO GET MY MONEY BACK AND SAVE MYSELF FROM THEIR ANTICS THE NEXT FEW YEARS OF MY COLLEGIATE LIFE IF A COMPANY ASK YOU FOR EVERY DOCUMENT UNDER THE SUN THAT SURELY SHOWS ITS YOU AND STILL CANT VERIFY AN ACCOUNT THAT WORKED FOR THREE YEARS THEYRE DOING ALITTLE MORE THAN PULLING YOUR LEG THEY PROBABLY INVEST IN VOYEURISM AND ARE RESPONSIBLE FOR THOSE POOR MENTAL HEALTH INCEPTION SOUNDS EMITTING FROM VEHICLES AND AIRCONDITIONERS FOR CLASSICAL CONDITONING AND SABATOGE OF FINANCIAL PROGRESS THEY MIGHT AS WELL ASK FOR A VIAL OF BLOOD AND CUT RIBBIONS FOR ILLUMINATTI INICIATES AT THE IMPLANT A CHIP DAY PARADE I AM NOT INTRESTED IN HIVHER ONE THEY CAN KEEP THOSE COUPLE GRAND AND THE SILLY $100.00 refunds from they offer as lawsuit payouts this is such a disgusting process they are worst THAN the casinos for Christ sake id rather call somebody to tame over this process and be like hey i vot higher one can you help me get my money from them no im not high but i would offer a couple hundred dollars if i could hire one high minded civic person that understands victimology and the deviant criminal behavior they are engaged in as a so called financial institution they are the epitome of blood suckers they couldnt verify my address one time and i freaking moved to a whole new place just to get them to work even though ups and courrier services functioned they are a true pain greek mythology dont even come close to higher one explotation and the fiddles they play through a persons soul is a true atrocity to human evolution what an insult to higher education i cant wait to get this resolved and logg into surveymonkey to report they finally accomplished something while connected with a college student its a pure shame but since im no game ill help get this party started for shy republicans http://www.minoritypayee.wix.com/minorityseller

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