Student Aid Processor Higher One Accused of Deception

By on April 18, 2017

Many students have left over financial aid money after paying for tuition and room and board.  That left over money is called a “refund” and placed into individual students accounts for them to use. The accounts are administered by third party financial institutions, and function like any other bank account.

In this case, the account processor was Higher One Holding Inc., and its accounts served as the initial depository for the student refund funds. Pursuant to law, students can choose to take the money out of the initial depository institution, or they can continue to bank with the initial depository.

Higher One Holdings Inc., and two banks at which the funds were held, Wex Inc., and Customers Bancorp, were sued in a potential class action in Pennsylvania and accused of misleading students into believing that banking with Higher One was the only option, or that alternate ones would have negative financial aid consequences such as delaying the disbursement of the funds.

In addition, the action alleges that the Higher One accounts carried high fees for certain ATM withdrawals, and forced other fees on students. The complaint notes that Higher One has reached settlements with the FDIC in the past about similar conduct but that the bad conduct continues.

The action is for a putative class of nationwide students that had Higher One accounts opened after December 20, 2013.