Higher One, the New Haven-based educational financial services firm, has acquired the Campus Solutions business of Sallie Mae in a $47.25 million deal that boosts the company’s offerings to schools and students.
The business from Sallie Mae, the student loan giant, includes e-commerce, bill payment systems, refund disbursement and administration of tuition payment plans, Higher One and Sallie Mae said in a joint release.
For Higher One, which ran afoul of regulators last year over fees and agreed to pay $11 million in restitution to students, the cash deal solidifies its standing as a dominant player in student financial services. The company is increasing its size and offerings at a time when investor confidence in the industry has been shaken by default rates, stricter federal regulations and other factors.
“Sallie Mae Campus Solutions has been a trusted business partner to institutions,” said Mark Volchek, CEO and co-founder of Higher One. “The Campus Solutions team is talented and possesses a profound knowledge of financial assistance and payment solutions. We are excited to increase the breadth of Higher One’s offerings and expect to continue to bring best practices for refund disbursement services, payment processing services, and data analytics now to more than 1,600 campuses and more than 13 million students nationwide.”
Higher One Holdings Inc. is a Connecticut success story that’s becoming a more established force in its industry. The firm was founded by Yale friends in 2000 with the idea of helping students receive and manage refunds from colleges, and helping colleges lower the cost of handing out the refunds by tying the money to a bank card that students could use for general purchases. The company branched out to a variety of technology-based services, including checking accounts.
Higher One came under criticism last year for charging multiple fees when students tried to make purchases with insufficient funds. After an FDIC investigation, it agreed last August to make restitution to 60,000 students and pay a $110,000 fine. Later in the year, the company offered an account with a flat monthly fee.
Higher One maintained it did not violate any laws or ethical standards, and in an interview last August, chairman and president Miles Lasater said the student charges at issue stemmed from practices in 2008 to 2010, which had already ended.
Higher One also reported first-quarter results Tuesday, with revenues of $57.4 million, slightly down from the same quarter a year earlier, and net income of $9.8 million, or 21 cents a diluted share, compared with $13.4 million, or 24 cents a share. Expenses were higher in several areas but Volchek said revenue sources were further diversified.
Shares have been trending downward since the start of 2012, when they traded at around $18. Shares closed at $9.87 Tuesday before the late-day announcement of the merger and earnings.
Sallie Mae is the nickname for SLM Corp., which was founded in 1972 as the Student Loan Marketing Association, federally chartered to administer government-backed student loans. The company became fully private in 2004 and issues private student loans, but also administers remaining federal loans under a program that is winding down. Direct federal loans to students have hurt profits at Sallie Mae, which is based in Newark, Del.
The Fortune 500 list for 2013 is out, and the ranking of publicly traded U.S. companies by total sales contains two new triumphs for Connecticut and one outrage.
In all, Connecticut has 16 companies on the list, our largest total in recent years, led, as always, by General Electric, the nation’s biggest industrial company. The Fairfield giant is No. 8 with $147 billion in sales last year, down from No. 6 in 2012.
United Technologies comes in at No. 50, which is down from its usual perch in the 40s, even though the Hartford-based industrial grew to $59.8 billion.
The triumphs, for two different reasons, are Priceline.com and Charter Communications. But let’s get the outrage out of the way first.
Northeast Utilities, a Connecticut stalwart for years, which fell off Fortune 500 in 2012 because of its size, is back at the No. 402 spot — in Massachusetts. Recall, NU merged with Boston-based NSTAR in April, 2012, giving it plenty of size to rejoin the list, with joint headquarters in Boston and Hartford.
So why does Massachusetts get the nod from Fortune? It was NU that bought NSTAR, technically, so we should prevail based on the famous business concept of first dibs. As it turns out, NU for years has had its official, legal address in Springfield, Mass. for some goofy reason. This year, that’s the headquarters location the map-makers at Fortune used in their list — even though they gave NU a Berlin, Conn. address in years past.
We appeal, and we move on to the good news: Priceline.com, homegrown in Norwalk, has expanded its way onto the list at No. 473, with a stunning $5.3 billion in revenues. Five years ago the travel services company wasn’t even in the Fortune list of the 1,000 biggest U.S. corporations, then it emerged at No. 931 in 2009, with $1.9 billion in sales.
The really good news for Priceline.com is that it had profits of $1.4 billion last year, one of the highest totals of any company in the last 100 on the fortune list.
Also joining the Connecticut list is Charter Communications, the cable TV company that moved its headquarters from St. Louis to Stamford after cutting a deal with the state. Charter promised to bring at least 200 jobs and invest at least $25 million in exchange for millions in low-rate loans, from Gov. Dannel P. Malloy, in the Next Five program.
Charter comes in at No. 340, with $7.5 billion in sales, up from No. 351 on the 2012 list, when it was in Missouri.
Hey, checkbook economic development counts. Connecticut is, after all, a capital of corporate headquarters. The other Connecticut company that joined the list by way of the Next Five program was Cigna, in 2012 — but that’s different since the Bloomfield health insurer already had thousands of employees here and was likely to move its head office from Philadelphia anyway.
Looking at the 16 companies in Connecticut, we see about six that have only a head office here, no major operations — led by Xerox, the $22.4 billion document and information company, in Norwalk, at No. 131.
On the overall list, Wal-Mart Stores ($469 billion) edged back ahead of Exxon Mobil ($450 billion) but Exxon is far more profitable, with $44.9 billion in net income, compared with $17 billion at Wal-Mart.
Travelers Cos., No. 116 on the list, is a New York company in name only, with its biggest operations in the Insurance Capital, but fair is fair, if we get Xerox, they get Travelers.
The Connecticut companies on the list, with 2012 sales in billions:
8 General Electric, Fairfield, $147 B
50 United Technologies, Hartford, $59.8 B
112 The Hartford Financial Services Group, Hartford, 26.4 B
245 Stanley Black & Decker, New Britain, 11.1 B
340 Charter Communications, Stamford, 7.5 B
399 EMCOR Group, Norwalk, 6.3 B
400 Starwood Hotels & Resorts, Stamford, 6.3 B
438 W.R. Berkley, Greenwich, 5.8 B
473 Priceline.com, Norwalk, 5.3 B
489 Pitney Bowes, Stamford, $5 B
492 Frontier Communications, $5 B
Texas Governor Rick Perry might not have been able to name three federal agencies he’d close, but he has his sights attracting on at least that many Connecticut gun manufacturers and he used the NRA convention in Houston over the last four days to make his best pitch.
Along with his famous charm, Perry had 70,000 gun enthusiasts on hand to help make the case for firearms companies feeling unloved back home. One firm, PTR Industries of Bristol, already said it will exit Connecticut and it’s starting to look like others will head South or West.
The Republican governor and the Texas lieutenant governor both met with Mark Malkowski, owner of Stag Arms of New Britain, who was in Houston along with six other company managers and employees from Thursday through Sunday.
“There are some intense meetings going on between the owner of Stag Arms and Rick Perry, the Governor of Texas at the NRA show in Houston,” Stag posted on its Facebook page along with a picture of Perry and Malkowski.
As he traveled back home Sunday, Malkowski, 35, said he also briefly toured a couple of possible locations. He said he’s not yet ready to scout real estate — in fact, he hasn’t even decided whether to leave Connecticut, where he employs 200 people and his father also owns a machining firm in New Britain.
But the Lone Star welcome placed that pro-gun-rights state right at or near the top of the list he’d consider.
“It was refreshing,” Malkowski said. “The approach, the climate out there is very friendly — industry friendly and business friendly. It doesn’t even compare, their governor vs. ours when it comes to our industry.”
He added, “They’ve had an increase in arts and culture, we spoke about that, too.”
Now that’s hitting hard, at one of Connecticut’s competitive advantages. But momentous events bring sweeping changes, and we may be witnessing a deep erosion of the region’s 200-year history as the nation’s gunmaking capital.
Pregnant women are among the people protected by state and federal anti-discrimination laws, and one of the key rules says employers must make a reasonable effort to find suitable work for women whose pregnancy keeps them from their normal line of duty.
A case involving the Wallingford Police Department reached a settlement Friday, and it highlights that rule — specifically, what exactly is a reasonable effort? Officer Annie Balcastro charged that the police chief and the town gave her no choice but to take an unpaid leave in January of 2012, after she became pregnant and was unable to work on regular patrol.
The ACLU of Connecticut, which was part of the case on behalf of Annie Balcastro, says the case is a rare reminder that employers — public sector or private — must heed the law. Rare, because there are not a lot of cases in which that particular rule is at issue.
Lawyers for Wallingford say the case illustrates no such thing, because they followed the rule — but settled for $20,000 to avert costly litigation.
Either way, the case, which was launched as a complaint to the state Commission on Human Rights and Opportunities, is a good window into the law. Balcastro sought work that would accommodate her inability to, for example, apprehend and handcuff a suspect. Police Chief Douglas Dortenzio, however, runs a department that has no so-called light-duty work, as a matter of policy. So he rejected options that included desk work and community policing assignments that many departments have.
“We have a policy that if you can’t perform the essential aspects of the job, there is no job for you in law enforcement,” said attorney Michael Rose of Rose Kallor LLP in Hartford, who represented the town. “We can’t make exceptions…we’re not going to go down that slippery slope, and I can tell you there are dozens of departments in this state who do that and they have officers who are making six figures and couldn’t make an arrest if their lives depended on it.”
That’s not okay when it comes to discrimination issues, said Sandra Staub, legal director of the American Civil Liberties Union in Connecticut, especially since a sergeant supported the idea of community policing for Balcastro.
“Our contention is that you can’t reconcile ‘no light duty’ with the requirement under the law that you accommodate a pregnant woman,” Staub said. “If the answer is already no, then there was by definition no reasonable effort.”
You might say the town should have offered Balcastro temporary work in a municipal office somewhere. That’s where the facts become muddy in this case. The town said it did make an offer, which she turned down. Staub said what happened was that Balcastro went to the town after a month of her leave, and asked for something — only to have town officials offer work she wasn’t qualified for, then drag their feet until she was fully disabled due to her pregnancy.
Balcastro, who Rose said was “a good officer and a good person,” gave birth in August. She later resigned from the force to remain with her baby, Staub said.
It’s unfortunate, in a way, that the dispute became muddy on the facts, and that it settled. Only a few dozen cases involving the rights of pregnant women come before CHRO each year, spokesman Jim O’Neill said, and virtually all are settled. It’s easy to see why, as the town of Wallingford and its insurer in this case would have been nuts to risk hundreds of thousands of dollars when it could walk away for a mere $20,000.
At some point it would be important to have a court decision on that core question: Should a public safety agency have to offer light-duty work to a pregnant woman or otherwise protected person who becomes disabled, even if that agency doesn’t have any light-duty jobs as a matter of policy?
I might side with the taxpayers on that one, but in this case there was an easy answer — a job in a non-police office for Balcastro, offered quickly.
Saturday is the biggest day of the year in horse racing and despite the efforts of the firm that runs the state’s 15 off-track betting locations, Connecticut residents will not have access to the long-awaited online system for placing bets.
Sportech, the British firm that runs the OTB locations, branded as Winners, won state approval in December to launch online horse racing parimutuel gaming in Connecticut. Sportech had said it would launch the service in April — in time for Saturday’s Kentucky Derby –but as of this week, a spokeswoman said the kinks weren’t all out yet.
It was a decision that came down to the wire, said Jennifer Conning of Sportech, which has its North American headquarters in New Haven.
“We wanted to be 100 percent happy with the product before we released it,” Conning said. “We could have gone either way and we just chose to be a little more conservative.”
The new system, when it does go online later this month, will represent the first legal, online gaming in Connecticut — although it’s not gaming in the traditional sense because it’s parimutuel, in which betters wager against the odds, rather than against the house, and the venue takes a fee.
Much of Sportech’s business in the United States is not running venues, but developing customized, interactive platforms for other venues. The Connecticut rollout is the first of a new generation for the company’s systems, Conning said, explaining the delay.
It’s too bad, as Saturday marks the start of the season with a bang, and would have been an opportunity for Sportech to have a high-profile launch. “The Kentucky Derby is our busiest day of the year,” Conning said.
Although some companies, including Churchill Downs, offer online betting for races, it’s not legal in Connecticut. Conning said Sportech has a marketing campaign to make it clear that it’s the only allowable online option for Connecticut residents betting on horses.
The online system did not require a change in the law the way traditional online gambling would, because it’s an extension of telephone betting — far more robust, with video of many races. Will online betting would hurt attendance at the 15 Winners locations around the state, including Winners Bradley, formerly known as the Bradley Teletheater?
“You have a large group of people who want the social experience,” Conning said. “This just adds another option for people that want the convenience.”
The message was clear Thursday as Connecticut’s five representatives in the U.S. House gathered in Hartford to talk about economic matters.
We need to invest. We need to spend.
DeLauro, Larson, Courtney, Himes and Esty
Dan Haar/The Hartford Courant
Whether it’s high-speed rail, advanced airline navigation systems, basic research, Head Start programs for kids, maintaining military bases, Obamacare or the Connecticut River dikes, the answer is consistent. When it comes to discretionary use of taxpayer money, this group of Democrats makes no apology for the role of government.
“We’ve got to find ways to fund these investments,” Rep. Elizabeth Esty of the 5th District said, speaking of several transportation concerns, including upgrading ports to handle the giant generation of ships that will pass through a widened Panama Canal starting next year.
Her comment epitomized the forum, organized by the MetroHartford Alliance and the New England Council, and was uttered in some way by at least three of the other four members of Congress. Rep. Rosa DeLauro, 3rd District, always colorful when talking about the opposition, said of Republicans who have cut back on federal spending for medical research, “It’s really the Flat Earth Society that we’re dealing with.”
Rep. Jim Himes of the 4th District in Fairfield County focused less on spending and more on regulation, as a member of the financial services and intelligence committees. He backed strong bank regulation, but said he’s not bashing Wall Street or calling for a breakup of the mega-firms — logical, considering his district.
“It’s a lonely notion sometimes but our financial services industry is one of this country’s competitive advantages,” Himes said. “The much maligned Dodd-Frank reform act, he said, “clarified a lot of the procedures that will be used when, and I don’t say ‘if’,’ it’s when, the financial services industry stumbles again.”
In every case, spending and regulation was said to be not a means to uphold the economy but an investment in the future — an idea that came into widespread political favor among Democrats relatively recently, as the moral argument for social spending, and the economic argument for defense spending, has met with increasing belligerence among Republicans who favor deep spending cuts.
The most obvious example is the military, where Rep. Joe Courtney, 2nd District, of the Armed Services Committee, said it’s unlikely the House will approve the dreaded base realignment and closing commission that Obama’s Pentagon wants. “My prediction is that it will be rejected just like last year,” he said, adding that Connecticut’s major military contracting programs appear to be on track for fiscal 2014.
On furloughs of civilian Department of Defense employees, forced by the sequester, Courtney said, “We’re talking about critical stuff.”
Rep. John Larson of the 1st District even defended one of the hot-button words that’s an unmentionable in anti-spending Beltway circles. “Earmarking is a very important thing,” Larson said. “It got pretty much destroyed because it was misunderstood.” His explanation: The House’s ability to set priorities for local district projects, such as the Army Corps of Engineers repairs of the river dikes, went down with the crackdown on earmarks.
Look for Larson’s comment to surface out of context when and if he runs for president.
All of it was almost too much for Mickey Herbert to bear. “An hour-and-a-half discussion and not one mention of the deficit and the debt,” said Herbert, former CEO of ConnectiCare and now head of Connecticut operations for Harvard Pilgrim. “I was about ready to come out of my shoes.”
Larson later pointed out that he did refer to the fiscal crisis, by way of defending health reform. “The debt is driven by health care costs,” he said. He supports a plan advanced by Aetna CEO Mark Bertolini that would add efficiency to the health system — what Larson called a paradigm shift away from the old standoff over spending and taxing.
“Here’s this stuff staring us in the face,” Larson said, “and we’re having an argument about ‘Tastes Great, Less Filling.’”
There’s a lot of hand-wringing in Connecticut media and politics circles about Gov. Dannel P. Malloy accepting a trip to Washington DC and a night at the White House Correspondents Dinner from People magazine, and rightly so.
Never mind the governor’s legal and ethical judgment in letting that happen. What is People Magazine doing, paying for politicians to travel and hang out?
It’s a serious issue because you, the readers, have a right to journalism untainted by paid sources. And you’re not always getting it.
News outlets paying for news is considered taboo in the United States but some organizations find ways around it. Some of the big TV networks — not local TV stations — offer paydays to news subjects for “exclusive rights” to photos, with a nod, nod, wink wink agreement that the exclusive extends to the interview.
We heard reports in Newtown of at least one major network sending large amounts of food platters to victims’ houses, then following up with requests for interviews.
U.S. newspapers adhere to the no-pay standard strictly and religiously, as far as we know, although that wasn’t always true. The American Journalism Review said in a 1999 report that the New York Times got an exclusive in 1912 by paying the Titanic’s wireless operator $1,000 for his story. That’s $23,500 today.
People magazine didn’t pay Malloy for news, as far as we know, when it kicked in more than $1,000 ($42 in 1912) to take him to the decadent media lovefest last weekend. Not exactly, anyway. But what happens the next time People wants a political exclusive? Will he jump? That’s the danger — and worse, when we have to believe paid sources who are unknown, suddenly selling their stories.
All of this matters more now than in the recent past because it’s harder to tell where your news is coming from. News outlets, whether they’re TV networks, local stations, magazines, newspapers or online only, compete minute-to-minute for public attention on the Web. So we’re seeing a media convergence, but without a convergence of ethics and standards. Which Web site you’re reading does matter.
Media critics including Abby Martin rightly decry the White House Correspondents Dinner and similar events as a giant conflict of interest. “It’s not just the fact that journalists are hanging out with celebrities. It’s that they’re befriending the very politicians and corporations they’re supposed to be holding to the fire,” Martin said on a video this week.
Chumminess is not the same as paying sources, but in both, it’s the media outlet that has to be watched closely, not just the politicians. Blame People magazine for this week’s flap, not Malloy.
Nearly a year after the start of Sunday alcoholic beverage sales, higher retail sales volumes are holding up for beer, wine and liquor, the state Department of Revenue Services said Thursday. That does not mean everyone is happy, as Courant Capitol Bureau Chief Chris Keating reported earlier this year.
From July through January, the total volume of alcoholic beverages was up by just under 3 percent to 45.5 million gallons, the department said. The increase for distilled spirits was more than 5 percent, and that is only available in package stores. That’s slightly higher than the liquor increase from May 2012, when the law was adopted, through November — meaning the increase held up through the holiday season.
Keating reported that independent retailers were not seeing an increase despite their longer hours, and that supermarkets were seeing the largest increases. How does that jive with the higher liquor sales? It could be that a few stores are seeing the biggest increases, as Revenue Services Commissioner Kevin B. Sullivan hinted in a comment with Thursday’s release.
“Overall,” Sullivan said, “the results are positive and especially for those who stretched to be more competitive.”
It’s worth comparing increases of the last year with previous years’ results. In the two years ending June 30, 2012, beer sales were down by a total of 8 percent, distilled alcohol was up by 3.7 percent and wine was up by 5 percent.
Was the law worth passing? Not to the small stores. For the state, the increase has meant an added $1.3 million in excise taxes through January, the department said. So it’s not about the money — it’s simply a consumer convenience at the cost of time off for hardworking independent package store owners.
Indiana is now the only state that bans Sunday alcohol sales.
When it comes to family-friendly corporate policies, Yahoo CEO Marissa Meyer is all over the lot. Last year she ordered most work-at-home employees back to the office, but on Tuesday she extended paid maternity and paternity leave to 16 weeks for mothers, 8 weeks for fathers.
Marissa Mayer, Yahoo CEO
Reuters photo
CNNMoney sorts it out by saying Mayer, a new mother, is rightly focusing on turning the company around. That’s what Yahoo really needs — a clear definition.
Can Connecticut companies, especially the old-line ones, offer as much paid leave? Silicon Valley is a different culture, so for most the answer is no. Let me know about exceptions.
At Quinnipiac University, management professor David Cadden points out that Yahoo’s new paid leave policy is middle-of-the road — for Europe:
“It is extremely gratifying to hear that Yahoo has decided to double the maternity and paternity leave time….CEO Mayer has recognized that employees aren’t singularly driven by just the paycheck. They look and are motivated by other benefits. These include the ability to raise a family. She had curtailed Yahoo’s employees’ ability to work at home which aided many of them in raising their family. While extremely generous by American standards, Yahoos’ policies for maternal and paternal would be merely average in the Northern European context. Such policies are critical in attracting and retaining technically competent individuals. For a period of time, Xerox Corporation had in many of its facilities on-site daycare for young children. CEO Mayer has a comparable capability for herself. She had a nursery built next to her office.”
Among the many big headaches standing in the way of a smooth rollout of health reform and mandatory medical coverage for everyone, the application form created by the federal government was not a problem. Yet when it came out earlier this year, critics said the paper version of the application, at 21 pages, was too long and complicated.
It was perfectly clear and would have given applicants the instructions they needed and the health exchanges in Connecticut and other states the information they needed, which I said in a blog post when it came out. But now the government has caved in to the critics and produced a shorter form — said to be three pages for individuals. President Obama cited the change Tuesday as a way his government is responding to citizens.
Click here to see the original 21-page application
Click here to see the new shorter form for individuals
Click here to see the new shorter form for families
It’s shorter, but that’s partly just because of how the pages are counted. The new forms don’t have page numbers on the instructions, so that magically zaps a couple of pages right off. Also, the new family form has room for just two people including the applicant. That means anyone with a household of three or more will have to copy pages, making sure to get the right ones, and attach them — leaving lots of room for problems.
The new application is also more confusing in lots of small ways that will add up. For example, the old form says clearly, “We need to know about any health insurance you could get through a job,” and it walks the applicant through simple questions that bring out a clear answer. The new form says, “Is anyone listed on this application offered health coverage from a job?” Well, to paraphrase a great president, it depends on what “offered” means.
The new form could also make it harder for the health exchanges to get an overall picture of the people seeking coverage, mostly with federal subsidies.
American civilization will not hinge on how the applications for subsidized health coverage turn out. Most people should do the form online and everyone who needs help will get it. The point here is that when it comes to making government more efficient, something that looks simpler might not be.
In this case the Centers for Medicare and Medicaid Services caved in to a knee-jerk response by critics who think people who need health insurance cannot, and should not, take an hour to make sure they get it.
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