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Published January 12, 2011, 10:34 PM

How Does Having Loan Refunds on Debit Card Affect Students?

Students can get their refunds via check, which is the most traditional way, but UND is one out of many universities that offer that refund on a debit card. But is having that money on a card encouraging frivolous spending?

Many students at UND are beginning their semester with a little extra cash left over from their financial aid or scholarships. And they have a few options on how they can get their money.

Students can get their refunds via check, which is the most traditional way, but UND is one out of many universities that offer that refund on a debit card. But is having that money on a card encouraging frivolous spending?

Over 700 colleges and five million students use the debit card through the company, Higher One. The company encourages students to spend their refunds wisely.

Critics say, not many students using the card do this.

"It's almost like free money. They can spend it on beer, food, anything," freshman Dane Estes said.

UND has used the program for about three years. One official thinks distributing refunds this way doesn't make the money too easily available.

"Too available compared to what? If you get it as a check, you probably have a checking account that you would just put that money in your checking account," President of University Relations Peter Johnson said.

Johnson says using the card program saves the university a lot of money on check processing and paper. But is it saving cash for students? In 2009, the Higher One company made $75 million and could double that in 2010. Higher One charges $20 to replace a lost card. $19 a month for an account that has been inactive for nine months, and 50 cents any time a customer keys in a PIN instead of swiping the card,

"I have not heard of these fees. I suppose if a student lost a card this would happen. We would encourage them to keep it in a safe place, of course," Johnson said.

Johnson says for the most part, there hasn't been a lot of negative feedback about the card.

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