It happened at a bar and restaurant in Grand Forks, N.D., but it could have been at any college campus in America.
College kids were enjoying pizza and beer, and paying for it all with a debit MasterCard. But this was not any debit card. The funds behind it come from student financial aid.
The card is the brainchild of Miles Lasater and Mark Volchek, who came up with the concept when they were students at Yale and turned it into a business called Higher One , which went public in 2010. Higher One reported $75 million in revenue in 2009, and is on pace to more than double that in 2010, with some 700 colleges and 5 million students on board. And the business is built around that debit card.
According to the company, roughly half of student borrowers receive aid that covers more than their tuition. Those funds are supposed to cover books, housing and living costs. Schools are required to refund that money to students, and in the past did so in the form of a paper check.
Lasater, who was a computer science major at Yale, and Volchek, who studied economics, reasoned they could streamline the process for schools and students, while at the same time making money from MasterCard transaction fees collected from merchants and debit-card fees collected from students. Schools quickly signed on, including the University of North Dakota .Page 1 of 4 | Next Page