Higher One nabs award as innovator of the year

As undergraduates in 1999, Mark Volchek ’00, Miles Lasater ’01 and Sean Glass ’03 founded the Yale Entrepreneurial Society. One year later they founded Higher One, a fast-growing financial-services company based in the Elm City.

Then, last month, just two years after first turning a profit, their company was named Business New Haven’s 2008 Innovator of the Year.

Higher One performs a service that no other company in the country performed when it was founded, Volchek said. Through its OneDisburse Refund Management service, the company disburses excess loan money owed to students by their colleges.

When students receive loans larger than the amount they owe in tuition and fees, schools, which receive the checks from the lenders, must reimburse the students. But the schools struggle with disbursing the refunds in a timely manner, and students want their money more quickly than the schools can manage, Volchek said.

Enter Higher One.

“We happened to find a niche in the higher-education market that was unserved, and we have a great group of clients who have kept the company sharp,” said Casey McGuane, the company’s senior vice president of client operations, who teamed up with the Yale trio shortly after they started Higher One.

Volchek is the company’s chairman and chief financial officer, and Lasater is chief operations officer. Glass is no longer with the company.

These founders of the Yale Entrepreneurial Society have maintained ties to the organization and to the New Haven community. Volchek was appointed by Mayor John DeStefano Jr. to the New Haven Development Commission, and executives from the company serve as judges on panels for YES competitions and help the organization bring entrepreneurs to speak, Volchek said.

Higher One’s clients are scattered across the country. Last year, schools such as Texas A&M, Corpus Christi, Eastern Kentucky University and SUNY Oswego partnered with Higher One. Volchek said Higher One has almost 100 university clients, most of which are two- or four-year public institutions.

But no Connecticut schools work with the company, he said.

“It’s because they haven’t been looking to innovate,” he said. “It’s unfortunate we are a fast-growing company in Connecticut but we can’t get the folks in our own backyard.”

Higher One has worked with the Yale College Council and administrators to set up a business arrangement with the University, but the company has been unable to sign a contract, Volchek said.

Yale’s price tag could be part of the reason. At schools with annual tuitions of $5,000 to $8,000, students are able to take out federal or private loans for a value higher than the actual tuition, and thus have money available for a refund from the university, McGuane said. But Yale’s high tuition leaves little money left over for a refund.

“At other universities, students can max out Stafford loans and have a few extra thousand dollars to spend on living expenses such as books or food,” McGuane said referring to the popular student loans.

In the United States, more than 5 percent of all college and university students have Higher One’s OneCard, according to a 2008 press release.

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