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MasterCard Student IDs Incite Boycott and Walkout: Debates about Privacy and Privatization
Author: Tony Rasmussen, (503) 725-8390,
Posted: November 19, 2004

Over 2,000 students at Portland State University are organized in a boycott and prepare for a walkout in protest of their new Campus ID Cards. The debit cards, emblazoned with a MasterCard logo, were recently mailed to students from the Connecticut-based "virtual bank" HigherOne. Students aim to have their university’s contract with Higher One terminated.

The cards will be used as a way to disburse financial aid monies and are seen by many as a startling step in the commercialization of the university. Due to budget crunches, universities nationwide face constant pressure to downsize and save money, and corporate sponsorship can appear as a panacea -- famous recent examples include UC Berkeley selling off the rights to its scientific research and Boise University naming its sports facility "Taco Bell Arena". Yet branding all students with a MasterCard and the outsourcing of student financial aid is a relatively new trend.

The decision to sign a contract with Higher One was made without any attempt to involve students in the process, including student representatives and organizations.

"Financial aid is sacred to many of us," said student Sascha Krader, "It's not like the privatization of other campus areas such as food services. It has a profound effect on student life."

Privacy issues are in the forefront of many students' minds. Without consent of students, and disregarding opposition by student representatives, the university has released all students' names and addresses to the bank, in addition to their date of birth and photograph. Higher One will use this information to distribute the new MasterCard ID Cards and solicit students to use their checking account. Higher One also invites merchants to solicit students through a customer rewards program. This release of information has inspired at least one student to file a lawsuit against the University and has aroused threats of legal action from many other students.

Others worry about "dataveillance" and the use of student tracking information.

"These payment cards enable massive surveillance and control of students. A major point of them is to collect transactional data for marketing," explained Chris Hoofnagle, Associate Director of the Electronic Privacy Information Center. "But they can also be used to control student spending … by parents, for example."

Many are also disgruntled about the obligation to carry a card they may be opposed to philosophically: some students are upset about the MasterCard logo, while others are upset about HigherOne's affiliation with Diebold, the Ohio-based company most famous for its electronic voting machines.

Students claim that the bank account attached to the cards is low quality: deposits must be mailed to Texas, the "virtual bank" has no branches on the West Coast, and the fee schedule is higher than all banks in the Portland area, the most notable of which is a $0.50 charge for every pin based transaction. Denise Wendler, the Director of Business Affairs at PSU and the employee responsible for signing the contract, recently stated that if she was a student she would use Direct Deposit over the HigherOne debit account.

Yet students are heavily encouraged to use the bank accounts: the official website, which all students are required to use, calls the accounts "easy refund" and says they are the "recommended" option.

“To get your financial aid disbursed to your own bank account, you have to specify that you don’t want the debit account several times during card activation,” said student Sam Rutledge, “That’s ridiculous and misleading. Serious concerns are raised when our university delivers us to a financial institution whose solicitation tactics are a step below spam marketers.”

HigherOne, started by a few recent graduates from Yale, has been in existence since 2000 and has 17 university clients, including Portland State University. According to the HigherOne website, they have handled some 354 million dollars since 2002. Other customers include the University of Wisconsin-La Crosse and Sam Houston University.

Over 2,000 PSU students have pledged to support the boycott. “We are going all the way with this boycott to get the contract terminated,” said student body president Christy Harper, “We are working with legislators and lobbyists at a state and federal level, in addition to working with key groups in our community.” The PSU chapter of the American Association of University Professors (AAUP) recently endorsed the boycott, and Harper pledges that “more organizations are on the way.” A statewide Day of Action against the cards, with a campus walkout and rally, is planned for November 23.

Contact: Tony Rasmussen, (503) 725-8390,
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