July 7, 2009

• News:  Universities Charging CC Fees

  The convenience of paying by credit card does not come without costs. During the past few years, lenders have burdened consumers with high interest rates, annual fees, and unfair penalties. To make matters worse, many credit card companies targeted college students with aggressive marketing strategies and deceptive contracts leaving them with piles of debt. Now to add insult to injury, some universities have begun charging their young adult students additional fees when they use their credit card to pay for school expenses and tuition. These cards are accepted across the globe by most product and services organizations at no additional cost. The aftermath of such action by the universities will drive the cost of an education up not to mention the additional interest students will be paying on the charges.

  Despite the concerns of making a quality education affordable and available to all students, colleges and universities across the nation are looking to implement the additional fee that could cost students hundreds of dollars. In some cases, universities charge a low fixed fee of $5 to $10. In other cases the fee exceeds 2.75% of the amount charged. That means if the student charges just one three credit hour class at $300 a credit hour, that's approximately $25. Now multiply that by 4 courses per semester and you have racked up an additional $100. On top of that, add the interest charges which will carry for a while since most college students are not able to pay their credit card balances off in full each month. Universities are charged 2% for each credit card transaction and say if they do not pass the fee onto the students who use them, all students will pick up the bill through increased tuition.

  In spite of their savvy advice, students continue to swipe the plastic when paying tuition bills. According to a recent report by Sallie Mae, last year nearly 33% of college students paid tuition by plastic. These are scary numbers in view of the fact that 8 out of 10 students carry a balance forward each month. Experts say paying tuition by credit card is a very risky idea and that students should avoid doing so. They recommend students and parents find alternative ways to pay for college like lower cost student loans.
  
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