Higher One, the financial service company WKU uses to refund student financial aid and fees, is being accused of misleading students and charging unjustified fees.

Sherry McFall, a student at Ventura College in Ventura, Calif., filed a class action lawsuit against Higher One after she activated her Higher One debit card issued by the university and was charged numerous fees, such as a PIN swipe fee and foreign ATM fee. The lawsuit has since been voluntarily dropped.

Higher One is also in the process of closing an investigation from federal regulators over fees charged to students, according to the Associated Press.

At WKU, students are encouraged to activate their WKU debit cards through the service to be refunded for dropped classes and to receive financial aid. 

The problem lies in how the card is marketed towards students.

Students can have their refunds sent from Higher One to a bank account of their choice.

However, opening a Higher One bank account to receive the money is marketed as being easier and faster, often with the endorsement of the university.

Opening the Higher One account also allows the card to function as a regular debit card.

Higher One bank accounts sport several fees, such as a fee for an account being overdrawn for more than 45 days, and a fee if the account is unused for six months.

Responding to the investigation, Higher One released a statement that reads in part, “Students working with Higher One are never charged fees to receive their tuition refund and will always have an option to have the funds distributed into a bank account of their choosing. It’s that simple.”

WKU bursar Belinda Higginbotham said there aren’t any current plans to stop using Higher One, as WKU has a good relationship with the company.

She said her office tries to make it clear to students that the Higher One bank account does not have to be used and students can have refunds deposited into existing bank accounts.

“Students are not required to have a relationship with Higher One,” Higginbotham said. “We are very upfront with the students and say ‘you have this option, if you already have a banking relationship, by all means have that deposited into your already existing account.’

“We want to make sure students are aware that it is completely their option to choose.”