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Learning from the Higher One experience

The University of Louisville sought a partner with a track record of providing electronic refunds.

Having grown up in a world of ATMs, debit cards and online banking, students at the University of Louisville wanted a better way to receive financial aid and other types of refunds. Receiving paper checks through the mail was slow, inconvenient and unreliable.

University administrators weren’t satisfied either. For them, the process was labor intensive, costly and inefficient.

“Students move a lot and forget to update their addresses,” says R. Jason Tomlinson, assistant vice president in the University of Louisville’s Office of the Vice President for Finance. “We’d get stacks of returned checks because the addresses would be bad.”

Even when the process worked perfectly, it took three days to issue checks and several more days for the checks to arrive in students’ mailboxes. Of course, then students had to make time in their busy schedules to get to the bank to deposit or cash the check.

“The idea came from the students through the student government,” Tomlinson says. “They really wanted electronic methods for receiving their refunds.”

In contracting with Higher One, the university found a solution that responded to both the students’ desires and the needs of the Bursar’s Office. The university started using the OneDisburse Refund Management program in the fall of 2006, and it’s been generating positive feedback from students, parents and administrators ever since.

About 80 percent of the university’s more than 21,500 students have chosen to collect their refund via the two electronic options that Higher One provides: direct deposit to a federally insured free checking account, called a OneAccount, or an electronic deposit to a third-party bank account. Students who opt for the OneAccount can use a debit card to access their accounts from ATMs on campus.

“When we disburse refunds, we wire the money to Higher One in the morning, and the students who have OneAccounts have the money by that afternoon, and sometimes it’s as fast as two hours,” Tomlinson says. Higher One mails checks to students who prefer to receive their refunds the old-fashioned way.

With a OneAccount, students with campus jobs can have paychecks direct deposited. Parents can also transfer money online into a student’s OneAccount.

The university intends to examine replacing its current student ID with the Higher One OneCard, which also could serve as a stored-value card for use in campus copiers and vending machines. “We want to have it all in one card,” Tomlinson says.

As the university sought proposals for electronic refunds, Higher One was the only company that had a track record in handling all of the services that were required. A local bank, for example, proposed partnering with another firm to do the job, but university officials were wary of that solution. “We would have had to deal with their growing pains because it was their first venture,” Tomlinson explains.

Using a bank presented other issues. The university didn’t want to do anything that would seem to encourage the use of credit cards. “But if we are dealing with a bank,” Tomlinson says, “credit cards are one of their revenue sources, and they want to promote them.”

Higher One’s clear focus on higher education and experience with other schools have proven very beneficial, Tomlinson says. Higher One also has the expertise to navigate the changing regulations governing the disbursement of financial aid.

“Higher One has been through this process with other schools, and we had the advantage of calling existing customers to see how everything was going,” Tomlinson says. “They’ve already worked through all these processes because they’ve been doing it for some time.”

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