Business

U.S. fines student loan servicing businesses

About 570,000 students who opened accounts with Higher One during a period when the company’s website and marketing materials were judged deceptive will receive restitution of fees totaling $24 million, the Federal Reserve said.
About 570,000 students who opened accounts with Higher One during a period when the company’s website and marketing materials were judged deceptive will receive restitution of fees totaling $24 million, the Federal Reserve said. Rick Nease MCT

The Federal Reserve and Federal Deposit Insurance Corp. fined Higher One Inc., a financial aid disbursement and loan refund company, saying that it misled students about its product and fees.

About 570,000 students who opened accounts with Higher One during a period when the company’s website and marketing materials were judged deceptive will receive restitution of fees totaling $24 million, the Federal Reserve said. The New Haven, Conn.-based company must pay a civil penalty of $2.2 million.

In a separate statement, the FDIC said that both Higher One and WEX Bank in Utah, which worked with the company, will be fined and together will have to pay $31 million in restitution to 900,000 consumers.

Bloomberg News

This story was originally published December 24, 2015 at 11:24 AM with the headline "U.S. fines student loan servicing businesses."

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