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Student loan borrowers may be familiar with the anxiety of waiting for financial aid refunds: Your loan has been disbursed to cover tuition and fees, and now you have to wait for the school to cut a paper check with the remaining balance, so you can deposit it to pay for remaining education expenses. In an age of mobile banking and electronic payments, it seems a bit cumbersome.

In recent years, financial services companies have tried to close that technology gap. Higher One is one company that offers a card that combines the functionality of a student ID and a debit card, to which the student’s financial aid refund is disbursed. They work with many schools, but one that recently was in the news is Cuesta College in San Luis Obispo, Calif.

At Cuesta, students can get a MyCuesta Card through Higher One, allowing them fast access to their financial aid. Given the option between waiting for a paper check and having money on hand through a debit card, the card is being praised my school officials.

Costs of Convenience

There are a lot of costs that come with the start of an academic term, like course materials, and if you’re paying for those with student loans, you’ll want to be able to buy them as soon as possible. A Cuesta College student who opted to receive his refund by check told KSBY he was still waiting for the money two weeks into the semester.

But Higher One’s debit card comes with extra costs, including non-bank ATM and overdraft fees. The possibility of incurring fees doesn’t necessarily make this a bad option, of course, but students should be aware of the fees, and find ways to minimize them at every opportunity. Over time, these fees can add up.

Perhaps products like the ones offered by Higher One will become more popular options for distributing financial aid, but no matter how students pay for their education, it’s important they understand the costs. Taking out student loans can be a great tool for covering education costs, but the average student debt load is growing (it hit $29,400 with the class of 2012), and borrowers need to prioritize their ability to repay the loans when deciding to earn their degrees.

Most important, student loans can help consumers establish a strong credit history by making payments on time. It’s also a good idea to keep an eye on your progress as you build a credit history, which you can do by monitoring your credit scores. There are tools that can help you do that, like Credit.com’s Credit Report Card, which updates your credit scores and an overview of your credit profile every month for free.

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