The college I attend decided, in their infinite wisdom, to bed with Higher One for financial aid disbursement to students. I received one spammy e-mail about it from my school (which didn't explain what it was) and then a debit card, bearing the Higher One logo, appeared in my mailbox.
First thing I did was visit the financial aid office at my school, because I didn't want the card. I'm an older student who is very smart with their finances, and this whole student debit card had "shady" written all over it. Here's the problem... the financial aid office told me I cannot "opt-out" of the card. If I ever want to see my federal financial aid, I have to use the services of Higher One.
Higher One gives three "choices" for disbursing financial aid to students: directly depositing funds (same day) in a Higher One checking account, depositing funds into a bank account of your choice (2-3 business days) or getting the standard paper check. My financial aid adviser kept talking up Higher One as if it was some Godsend. However, I don't think they're looking at it from any other angle than their profit margins.
If you choose to take the route of having your money disbursed into a Higher One checking account, you're left with few options to obtain those funds. My financial aid adviser kept saying how our campus is getting a Higher One ATM which will allow you to withdraw up to $500 per day without incurring fees. Umm... big red flag.
Let's do the math on this whole ATM debacle: 6000 students (each required to have the debit card) + 1 ATM for the entire campus + $500 trying to be withdrawn by each student in a day = EMPTY ATM. Considering most ATM machines are not stocked each day, this should be interesting. Higher One says that if this happens, you can withdraw funds from any other ATM and they will refund you the ATM fee. What they fail to mention is that they will only refund THEIR ATM fee, not the one that actual ATM charges you to use it.
You can also try to use the debit card as an actual debit card. However, if where you're using the card doesn't allow for credit, you're stuck with a 50 cent transaction fee for each purchase.
Then there's their option of depositing funds into your own bank account. Sounds great, except, the process they go through to get you the funds are ridiculous! They even show you, as you register your card, the lengthy process.
Here's the ridiculous process: college releases money, Higher One sends money to Federal Reserve, Federal Reserve sends money to 3rd party bank (i.e., my bank account), money is then available to spend. So... really, Higher One is the middle man and doesn't do a thing but send money to the Federal Reserve. Hmmm... sounds like a huge waste of time.
Finally, there's the paper check method. The website says it takes "5-7 business days" to disburse the check. In actuality, my financial aid adviser (as she was trying to talk me out of getting a paper check) said that it takes more like 30 business days AFTER the college releases the money. That's longer than I wait now for my financial aid check. It's basically them holding my funds hostage because I don't want to play their fee-laden game of "empty out the student's bank account".
My favorite part is that they charge if you aren't using your debit card. They say that if your account has a $0 balance they don't charge, but I can see the problems already. Someone at Higher One will make a mistake, balances go negative, students are unaware, lawyers are involved... the world implodes.
Basically, I'm incredibly angry that I'm being forced to use a financial product that I don't want. This company is not ethical, they hide their fee schedules (making them almost impossible to find on their website), they purposely confuse consumers and their FAQ page on their website is a joke. No questions are actually answered, only blatant attempts to get more money out of you by selling more products.
This entire system should be illegal, especially since it's taking students (most of which have no idea how to be financially responsible) to the cleaners. It's my financial aid, which I already have to pay back, with interest. No company is going to tell me how I can use my money and when I can have it... the government is already too good at that.