The down low on Higher One

The Vanguard closed the 2004-2005 school year with its "The Year That Was" issue. On the cover was a half-page photograph of some students in their retro-orange autumn wear that recalled the Vietnam protest era. These students were gathered around a girl with scissors and looked up as she raised her hands, high above her head, and cut her Higher One card in half.

And with that, the Vanguard equated the draft protests of the 1960s when the nation’s youth refused to terror-bomb South Vietnamese peasants resisting colonization, with protests of a student ID card and optional checking account.

Most students receive financial aid money by check or by direct deposit to a third-party checking account. These options are free and the card functions as ID only.

If you open the OneAccount checking account you may receive your money sooner, but you’ll pay fees for using the account, and inactivity fees for not using the account. You can also pay $20 for a non-Higher One ID and receive financial aid money through direct deposit.

If enough students rejected the OneAccount, Higher One would surely find creative ways to maximize its profit and the protests would begin again.

The Higher One Onecard replaced the previous card last November after PSU Business Affairs, with little student input, privatized and outsourced the management of all financial aid disbursement to the Connecticut company.

This was not the ordinary outsourcing, where it’s more profitable for corporations to rent human beings elsewhere, often in union-free countries with more docile labor markets guaranteed by state terror than it is to rent human beings in the U.S.

Privatizing and outsourcing financial aid for PSU students was done of necessity after years of budget and staff cuts made the PSU-run financial aid disbursement more difficult and less efficient.

PSU administration selected Higher One to manage all financial aid disbursement with little cost to the school, so the company makes money only when students use the optional checking account feature.

Higher One charges students 50 cents per debit transaction and $3 for hard copies of account statements. They also receive part of the "discount rate" MasterCard charges merchants, when the card is used for purchases.

Higher One also charges PSU "a small fee…for certain services, such as issuing a paper check refund," when students don’t open the checking account or choose direct deposit, according to the company’s web site.

Higher One explains its operations this way: "We have many customers, all of whom help us make a small amount of money. In the end, this adds up, enabling us to continue providing our services."

More accurately, Higher One has many customers and takes small, but not insignificant, amounts from all of them to maximize its profit and hopes the fees will remain a nuisance and not a problem for its customers (you) so it can continue taking its customers’ (your) and the school’s (your) money. That way it can expand and take small but not insignificant amounts from students at campuses across the land.

There were principled objections to the Higher One card, such as: it’s fundamentally wrong to send our financial aid money through and give our personal information to anyone, particularly a for-profit company thousands of miles away without our consent. There were other objections, like: "this card isn’t as good as it was supposed to be" and, "I can’t get into the computer lab on Broadway because this card wasn’t designed to open the door (which the previous card could do)."

If Higher One tweaks its services the latter arguments become irrelevant. The former argument, however, is not. It was wrong for PSU to give our personal information away, despite Higher One’s insistence that it "does not make money by selling consumer information."

A for-profit company follows only one principle: that of profit maximization. The only concerns of Higher One are the company’s financial costs versus its financial benefits. Higher One, like any company, will do whatever will bring it the greatest financial benefit, regardless of what its web site or the law says.

In a better world, the people affected by a decision would have some say in it; higher education would be free, particularly in the wealthiest nation in the history of the world; and you wouldn’t have to conduct a research project to understand your student ID card.

But we live in this world, however, so we don’t, it isn’t and you do.