There are a number of factors for this:

1. Virtually every University is feeling a financial pinch at some level, and they are all looking for new ways to save money. New, card-based refund programs offer enormous potential cost savings for schools by enabling electronic disbursements through the cards, and in many cases replacing more costly (in both time and money) paper check and ACH processes. Universities currently issue $15 billion in refund disbursements through more than 15 million payments. The administrative costs of processing and handling these payments are estimated at over $225 million per year. Some studies indicate that processing costs can run as high as $35 per paper check. And it has been reported that Federal student aid programs will grow in 2005, driven by annual increases in tuition much higher than the inflation rate. Financial aid will also continue to rise with the record number of college applications expected in the coming decade. These developments will only increase the numbers of refund disbursements by higher education institutions.

2. To remain competitive, Universities are expected to offer students more. Today’s students are more demanding when it comes to the services and conveniences they expect from their educational institution. Cards offer a perfect platform to deliver multiple services, from student identification, building and event access and on-campus stored value programs to advanced financial services including Debit Card and online banking options.

3. The new card-based refund programs are succeeding. Higher One processed nearly $93.5 million in financial aid disbursements to a customer base of 200,000 students at 13 universities this Fall (August 1st - October 15th, 2004), our largest volume in an academic term. Higher One’s proprietary refund program at a mid-size university of 15,000 can typically create $500,000 per year in cost avoidance. Universities can achieve a 100% return on investment and their current Stored Value and OneCard functions can be consolidated in a single card. Higher One has generated an estimated $4.2 million in total cost avoidance for its clients since 2002 and in a recent customer satisfaction survey, eighty-five percent of students indicated they are satisfied or very satisfied with our OneCard and the OneDisburse service.

Higher One gives students the choice of how they receive refunds, including our exclusive method of depositing their funds into a free, online checking account tied directly to their card…giving them same-day access to their money compared to float times of 24-48 hours for typical bank ACH and 5-7 days for paper checks. For university card managers, refund disbursement programs like ours provide a way to show an additional return on investment for their finance office. They increase the role the card office plays in student services, and the services that they offer students through cards.

We currently offer two ways our cards can function as the vehicle for disbursements – as a student ID OneCard that combines all the financial and OneCard features into the ID card, or a non-ID OneCard that offers our suite of financial services. Students can sign up to receive disbursements, add or change services like a MasterCard Debit, and monitor their account through a University branded web site. Our cards are designed to integrate seamlessly with existing on-campus functionality including Stored Value Programs, and we even offer a proprietary Autoload feature that automatically maintains a pre-set balance in a student’s declining balance account.

Higher One’s service is a turnkey, low cost solution that can be implemented in 10-12 weeks and is a benefit to all participants. Students save time by avoiding long lines to pick up paper checks, have the added convenience of a choice of online banking and Debit Card functionality and can enjoy rewards programs for purchases on and off campus. Universities save money and administrative staff time by virtually eliminating the long, drawn-out financial aid refund disbursement process and even save on card production costs.

Visit Higher One on the web at www.higherone.com.