Merced College shouldn’t saddle students with Higher One’s fees

During the 2013-14 academic year, Merced College’s administration chose to contract out the distribution of student aid to Higher One, a publicly traded for-profit company. It did this without input from affected students.

Higher One profits from students’ financial aid money by charging fees for the use of its front-loaded debit cards. Higher One’s practices have been scrutinized by the U.S. Department of Education, Government Accountability Office, Federal Deposit Insurance Corp. and many others for alleged abuses including deceptive practices and excessive fees. Higher One has paid millions in out-of-court legal settlements. Modesto Junior College, Columbia College and many other community colleges across the state also use Higher One to disburse student aid funds to students.

I teach critical thinking courses at Merced College. After hearing many students complain about Higher One, I decided to use their experiences as a teachable moment. In a voluntary assignment, several students conducted research about Higher One for either extra credit or as one of their required essays. Thus began an ongoing battle with students and their faculty supporters on one side, and Higher One’s public relations representatives and Merced College administrators on the other.

The students framed the assignment as a pro-con debate over the claim that adopting Higher One is in the best interests of students; their unanimous conclusion was that it is not. They arrived at this conclusion after analyzing the claims of Higher One, preparing and distributing 300 student surveys, and conducting interviews of administrators.

Simply put, if given a choice between the Higher One debit card and an old-fashioned check, most students prefer a check. This is not a surprise. Most of us prefer to be paid with a check, often automatically deposited, rather than a fee-based debit card of a company not of our choosing.

After my students completed their research, I presented it to the board of trustees at its February 2014 meeting. There was a follow-up article in the Merced Sun-Star (“Merced College students sing the blues over ‘blue card,’ ” Feb. 7, 2014) wherein several trustees shared concerns. To their credit, the trustees called for a more thorough survey of students to be completed upon which they would decide if the college would continue to do business with Higher One.

The administration’s survey was conducted this year. I was able to gain access to the survey instrument and results through the district’s website.

To put it mildly, the survey was biased toward a positive result for Higher One. However, even with the bias, there was still an overall negative student response to Higher One, which was then minimized in the administration’s report to the trustees. This makes it clear that administrators have little concern for students’ choices.

The survey’s bias is exemplified in many ways, including the fact that only two of 22 questions directly address student preferences concerning delivery of financial aid. In both cases, Higher One is not the students’ preference. One question directly asked how students would prefer to have their financial aid disbursed, and nearly 60 percent of respondents chose either a paper check or, the top choice, direct deposit into their bank account. This is in contrast to Higher One’s 40 percent.

Equally problematic is the absence of reporting on student comments, which were overwhelmingly negative. One question alone contained more than 30 comments expressing dissatisfaction with Higher One due to excessive fees and unfair waiting periods. There was not one positive comment.

Aside from exploiting financially strapped students, other ethical concerns that surface by subcontracting financial aid disbursement to Higher One are that the college is redistributing jobs from our community, and the money taxpayers are spending to assist poor students is instead going into the pockets of Wall Street profiteers.

The college administration is guilty of shifting administrative costs of disbursing student financial aid onto our most vulnerable students, who no longer have the choice to receive their money directly through their campus payroll office on disbursement day free of charge.

Now, they are also guilty of misrepresenting students’ dissatisfaction with that choice. One can only conclude that Merced College’s administration is more concerned about making money off its contract with Higher One than assisting Merced’s financially strapped students.

This story was originally published August 6, 2015 at 2:31 PM with the headline "Merced College shouldn’t saddle students with Higher One’s fees."