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| Mark Volchek, left, and Miles Lasater helped start Higher One, which is criticized for its fees |
The New York Times,
Published: May 30, 2012
College campuses have long been attractive hunting grounds for financial institutions.
In recent years, however, their efforts to
woo students have gotten banks and other financial institutions in trouble with
regulators. They are now effectively prohibited from providing gifts to
students who sign up for credit cards. And the colleges themselves can no
longer be paid by the lenders to steer students to student loans .
But many colleges, struggling
to offset cuts in state funds and under pressure to keep tuition down, are
finding new ways to strike deals with financial institutions, by turning
student IDs into debit cards and allowing lenders to take over disbursement of
financial aid.
In a recent report the United
States Public Interest Research Group Education Fund, found that nearly 900
colleges and universities have card partnerships with financial institutions;
in some instances, the colleges receive hefty payments from banks for the
exclusive access to students; in other instances, the schools save money by
outsourcing financial functions to banks or other vendors.
Since the financial
institution’s logo is often stamped on campus IDs, students may sign up for an
account because they believe the university has endorsed the product, the
report says.
The biggest player in the field
is Higher One, which was started by three Yale undergraduates in 2000 and now
has contracts with 520 college campuses, the report says. The company’s fees hve
prompted complaints at Western Washington University and a handful of
other campuses. But Miles Lasater, one
of the co-founders, said his company has provided a valuable service for
colleges and universities and a good deal for students. Student accounts are
meant to be free, he said, and students are charged only for optional services. Read The Article
I'm Ron Denaro and thanks for joining College Campus Chatter today!
Ron Denaro is the president of College Campus Trips, a tour company providing high school students with tours of college campuses, nationwide. For more information, call (954) 567-5751 or e-mail: ron@collegecampustrips.com
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