Higher Education Passing on Credit Card Fees BestBadCreditCards.info

Higher Education Passing on Credit Card Fees

July 27, 2009 – 3:02 pm

With students increasingly turning to plastic to pay rising college costs, public and private colleges and universities across the country are passing on the cost of using credit to their students. Tuition being paid with plastic will now incur a fee of up to 2.75%. In the spring of 2009, Northwestern University began accepting credit cards to cover undergraduate tuition and tacked on the 2.75% fee. The University of Illinois and Harper College in Rolling Meadows, IL, also charge a fee to students paying with credit cards.

Universally accepted at businesses around the globe at no additional cost, credit cards have been one way students make ends meet. Almost one third of students charged tuition last year, up from 24 percent in 2004, according to a study by student loan giant Sallie Mae.

According to a Nilson Report, merchants and institutions pay an average of 2% to process each credit card transaction. Colleges and universities have traditionally paid this fee. But that is changing: In 2007, 26% of colleges charged a credit card payment fee, either directly or through a third party, up from 14%in 2003, according to surveys by the National Association of College and University Business Officers.

The move will ultimately drive up the already skyrocketing cost of college by hundreds or even thousands of dollars and hits those who are unable to pay off their balances particularly hard. Nearly four out of five college students carry a balance each month and face finance charges. The fee to students is being described as the price of convenience and is paid to the vendor and not the educational institution. Doug Beckmann, Senior Associate Vice Preside for Business and Finance at University of Illinois said charging the fee is “the only way U. of I. could afford to accept credit cards for tuition.”

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