News

Senate Education and Workforce Committee

April 6, 2004

 

 

Dee Wendler

Director of Business Affairs

Hearing on SB 643

 

Chair Walker and Members of the Senate Education and Workforce Committee, my name is Dee Wendler, director of business affairs at Portland State University. I am here today representing President Bernstine and the University and want to convey our strong support of the efforts by the Oregon Student Association, the OUS, and your colleagues and you for legislation that affirms the need to protect social security numbers of students.

The impetus for this legislation, we know, was the PSU contract with Higher One. I want to take a few minutes to talk about that contract and the University’s interest in providing services to students. I want to highlight three areas that explain our relationship with Higher One and the goals for our contract with them.

1. Protect Students Social Security Numbers.

The Legislature has already spoken about social security numbers and approved HB 2658 last session. Oregon’s legislation, and also Federal concerns, led PSU to the need to change the way we provide identification cards to PSU students. Up until this year, the PSU student identification number was their social security number and therefore, all PSU students needed new identification numbers and cards.

At a time when the University was taking tremendous budget cuts due to state finances, we looked for new and cost-effective ways to provide those identification cards and improve services to students. Our contract with Higher One requires them to provide all students with new identification cards at no cost to the student or the campus.

2. Provide Students With Quick Access to Their Financial Aid Funds.

Due to budget constraints, combined with increased enrollment, the infrastructure to support student financial aid allocations, awards, and disbursements has been severely challenged. The University has a commitment to access and for most of our students that requires timely disbursement of financial aid. Under the old PSU system, students could request a paper check from the University or direct deposit of their funds. Under the Higher One contract, students have three options to receive their excess financial aid funds (those that exceed tuition and university fees): direct deposit to their checking account; a paper check mailed to their home; or a debit card function managed by Higher One. The University’s role in this arrangement is to electronically transfer the funds to Higher One and in many instances students have access to their money within 24 hours of that notification. The system has been streamlined, the money is available to the students much earlier than before, and nearly all of our students have been pleased with the process.

3. Provide Those Students Who Are Unable To Open Checking Accounts With A Safe Means of Protecting Their Financial Aid.

Portland State University enrolls a large number of nontraditional students and students who are somewhat transient in their housing arrangements. Students without a permanent home address are unable to open up checking accounts with local banks. Students who have had a bad credit experience also find it difficult to establish arrangements with financial institutions. Under the previous policy these students would receive a financial aid check from PSU and then, after having cashed it be left with large amounts of cash to protect. That was unsafe for the student. The University’s Higher One contract requires them to establish a financial arrangement with any student who seeks one, regardless of past financial challenges. That means a student who activates the debit card function would have his/her excess financial aid allocated to that card which carries with it all the protections associated with any other debit card. That means if the card is stolen, the student’s funds are protected given appropriate notification to Higher One.

Those are the reasons we entered into this contract. What has the experience been so far?

First, I want to acknowledge that the University did not provide adequate consultation with students prior to signing the contract. We did solicit student involvement, but acknowledge that our efforts were not as proactive as our student leaders would have preferred. Faculty and staff were involved in the process of developing the Request for Proposals and in selecting Higher One as the contractor.

As a result of the student concerns, PSU’s procedures regarding contracts and consultations with students have been changed. We appreciate the leadership of our student government on this issue and are pleased that our student leaders have used this experience to encourage student participation on more campus committees. As a result of the student involvement, PSU has made substantial efforts to improve our work with Higher One and the services to students. We are working with the company to change the way students activate their cards because we agree with our students that the web site is difficult to navigate. We have amended our contract with Higher One to explicitly state that the University will not provide them with student social security numbers; the only way Higher One receives social security numbers is when the student gives it to them in order to open up the debit card function – this is required in all instances where we enter into a relationship with a financial institution.

As of today, our activation rate among all students is 57 percent. Of those who have activated their cards, 29 percent have requested that funds go directly to their existing bank or credit union; 44 percent have requested a paper check be mailed to their residence; and 26 percent have opened the OneAccount, which is the debit card operated by Higher One. That data suggest that students understand the options available to them and are making decisions that best meet their needs.

Finally, President Bernstine recognized that some students would simply not want to use the identification card provided by Higher One and provided them with another option. The University will replace their Higher One identification card provided the students sign up for direct deposit of their funds. Additionally, the University charges them the cost of producing this replacement which is $20.00. Last term, in order to support those students who had strong feelings about this new card, the University paid for half the cost of the new replacement card, thus charging the student $10.00. As of today, 141 students have selected this option.

I hope this addresses some of the questions you might have regarding the University’s work on providing our students with a new identification card. In closing, we pledge our commitment to working with OSA, and others on resolving their concerns regarding release of social security numbers.