AURORA, Colo (CBS4)– College students are headed back to class, and as they pay tuition, buy books and do business with their school they may soon get a debit card offer in the mail. Universities across the country are making deals with banks and financial institutions, outsourcing financial refunds and other services that the schools used to handle themselves.
Lance Olson and his daughter, Sarah, got the offer. Both go to Front Range Community College, both were due a refund, and both were offered that refund on a HigherOne debit card.
“We’re not interested in the debit card because we already have a banking relationship,” Olson told CBS4.
HigherOne says the debit card is the fastest, easiest way to get a college refund.
“HigherOne, in their literature says they have 21 days to assist that effort, and they take that time to solicit you,” Olson said.
Olson estimates it could be a month before the check comes in the mail.
“I think the refund takes too long,” Olson said.
HigherOne has card agreements with 520 college campuses nationwide. They are soliciting more than 4 million students. HigherOne was founded in 2000 by three college students who wanted to update the systems that colleges use to refund money to students. HigherOne helps universities replace paper-based systems with more update banking options like the debit card.
But activate the card, and you activate a real bank account complete with fees. Read the fine print and you find that every time you sue the card with the PIN number for a purchase and you pay 50 cents. Use the out-of-network ATM, you’ll pay $2.50. Lose your card, you’ll pay a $50 replacement charge. HigherOne calls these fees in line with other personal bank accounts.
“We’ve had discussions with HigherOne. When we first started with them they were not as up front with their fees as they could’ve been,” said Julie Ouska, the Vice President of Information Technology at the Colorado Community College System.
CCCS signed a $430,000 dollar 5-year deal with HigherOne in 2010.
“They’ve recently established where if a student goes in to select the HigherOne account, they actually have to read through the fees and agree to them before they can initiate that account,” Ouska explained.
Ouska says the debit cards improve service for the student and saves the college money.
“It was more cost effective. I think it costs us 40 cents a refund and you couldn’t possibly print and mail or hand out those checks for 40 cents a piece,” Ouska said.
“Not only is this a debit MasterCard, but it’s associated with a community college system, so it’s almost like the college is asking that you authorize the account,” Olson said.
HigherOne pointed out that students do not have to activate the card to get their refund. The financial institute sets up a website for every school they serve. Students who log onto the website are given a choice. They can activate the debit card and get the refund instantly. They can have the refund transferred to their personal account within 2-3 business days, or they can have a paper check cut and mailed within 5-7 days.
– Read and understand the fine print.
– Understand the access you’ll have to your money.
– Let campus administrators know if there is a problem with your account.
The bottom line here is every student has a choice. You need to research and pick the bank account that fits your needs.
– Written for the Web by CBS4 Special Projects Producer Libby Smith