A card called “Higher One” lets college kids take their student loan and turn it into a debit card they can use to buy pizza, beer, and other learning essentials with.

The card was cooked up by two Yale students who in typical Yaley fashion noticed an opportunity to make some arbitrage bucks from when students get more aid than covers their tuition. Schools usually refund that money to students with a paper check. But by putting the balance on a debit card instead, schools could eliminate the paper costs, students would get immediate access to their money, and the entrepreneurs could collect on the transaction and service fees.

The card has a $20 replacement fee and a $19 a month inactivity fee after 9 months. PIN transactions cost an extra $.50 a piece.

The card’s makers say students can avoid the fees if they use the card properly, which, in this case, would seem to be to transfer the account balance into your main bank account. You know, sort of like depositing a check.

Put That Pizza On My Student Loan [CNBC] (Thanks to David!)

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