Higher One

Higher One was established in 2000 by Yale students Sean Glass, Miles Lasater, and Mark Volchek. The founders, who were active in the Yale Entrepreneurial Society, identified a need to modernize how colleges and universities handled financial aid disbursements. Their initial focus was to create an electronic method for distributing refunds, aiming to increase speed and efficiency for students and reduce administrative expenses for institutions.

The company's core business model revolved around providing payment technology and services to the higher education market. For its university clients, Higher One offered an integrated suite of products that included the Refund Management® disbursement service and the CASHNet® suite for payment processing. This created a streamlined process for institutions to manage student refunds and collect payments for tuition and other fees. Revenue was primarily generated from the banking services offered to students, creating a business structure that provided low-cost disbursement solutions to schools while earning from student accounts. Through partnerships with banks, the company offered FDIC-insured checking accounts, marketed as the OneAccount, which were integrated with student ID cards.

Over the years, Higher One expanded its service offerings through strategic acquisitions, such as CASHNet in 2009 and Campus Labs in 2012, adding capabilities like electronic billing, tuition payment plans, and data analytics. The company experienced significant growth, leading to a successful Initial Public Offering (IPO) on the New York Stock Exchange in 2010. At its peak, the firm served approximately 13 million students across hundreds of campuses.

However, the company faced considerable scrutiny and legal challenges regarding its fee structures and marketing practices. Class-action lawsuits and regulatory actions from bodies like the FDIC alleged that students were being steered into accounts with poorly disclosed and potentially abusive fees. These controversies, coupled with new federal regulations aimed at protecting students from unwarranted fees, impacted the company's operations. In response to these pressures, Higher One began to divest parts of its business. In 2016, the company sold its disbursements and OneAccount business to Customers Bank. Subsequently, Blackboard Inc. acquired the remaining Higher One operations, primarily the CASHNet payments business, for approximately $260 million, leading to Higher One becoming a wholly owned subsidiary and its stock being delisted from the NYSE.

Keywords: financial aid disbursement, higher education payments, fintech, tuition management, student banking, campus commerce, CASHNet, OneAccount, Blackboard, education technology