Higher One Ordered To Compensate Students
Approximately 1.5 million students were paying fees in order to access their financial aid through Higher One Inc. The Federal Reserve and Federal Deposit Insurance Corp. is now ordering Higher One Inc. to compensate these students. For the time that Higher One Inc. was falsely advertising their services, 570,000 students opened accounts. These students will now be able to receive part of the $24 million that Higher One Inc. must pay in restitution fees. The company will also need to pay $2.23 million for a civil suit. WEX Bank in Utah also worked with Higher One Inc. and combined, the two companies will have to pay fines in the amount of $31 million to another 900,000 students. WEX Bank will also need to pay $1.75 million for a civil suit.
Federal Governor Lael Brainard stated, “Deceptive marketing practices with respect to student loans will not be tolerated. This action ensures that students who were misled into paying fees to access their financial aid funds will receive restitution for those fees.”
The U.S. Department of Education has been taking steps to ensure that students are not required to pay fees to access their financial aid money. They are able to choose how they receive their money instead of needing to open the One Account through Higher One Inc. Higher One Inc. had neglected to tell students about these options, as well as not giving them any fee or limitation information for the One Account. Higher One also displayed school logos during presentations and meetings, which allowed students to believe that the college was endorsing the product that was offered.
FDIC Chairman Martin J. Gruenberg stated, “It is important that financial products offered to college students under the sponsorship of their universities are clear, transparent and trustworthy.”
Higher One Holdings Inc. stated on December 15th that it was planning on selling all of their assets and liabilities which includes One Account to Customers Bank for $37 million. The parent company of Customers Bank is Customers Bancorp Inc. and Chief Financial Officer Robert Wahlman stated in a phone interview that he expects all issues to be completed before finalizing the sale.
If you feel you were defrauded by the school you attended or you are being treated poorly as a distressed borrower by your creditors, talk to an attorney to find out what options you have regarding your student loans.