Students at the University of Washington in Seattle now have the option of paying their tuition with credit cards, but administrators at Northwestern have decided against implementing a similar policy.
Beginning this quarter, the University of Washington began allowing its students and their parents to pay tuition and fees using a credit card over the Internet or through an automated phone service.
“We had a lot of pressure, especially from parents, from people who are out of the country and from people who wanted frequent flyer miles (earned from credit card purchases),” said Ruth Johnston, assistant controller for student fiscal services at the University of Washington.
Johnston said that so far the university has received 1,442 credit card payments totaling $1.8 million.
The option works because it is easy, fast and available 24 hours a day, Johnston said.
Rebecca Dixon, associate provost of university enrollment at NU, said credit cards have been considered as a possible tuition payment method, but NU has decided against the idea.
One of the biggest obstacles at NU is an average 2 percent fee that credit card companies charge for each transaction. To offset this cost, the University of Washington charges convenience fees of $4 for credit card transactions less than $150, and $40 for transactions of more than $150.
Full-time undergraduate tuition at the University of Washington is $1,328 for residents and $4,419 for non-residents. The average credit card tuition payment is about $1,900.
At NU, tuition for 2001-2002 is estimated at $25,839. As a result, the 2 percent fee would pose a much bigger problem here, where it would amount to more than $500 for a year’s tuition.
If NU implemented a policy similar to the University of Washington’s and required those paying with credit cards to cover the fee themselves, no one would be likely to use that payment option because of the extra expense involved, Dixon said.
Another option would be for the university to pick up the fee, but that would cost NU about $1.5 million, Dixon said.
Steve Tomczyk, father of a Weinberg freshman, said he would rather have tuition money go to the university than cover a transaction fee.
“I’m sympathetic to the university’s point of view,” he said. “I’d rather see Northwestern get all the money they can and then turn around and use it for education.”
Without the hassle of transaction fees, paying by credit card would be attractive because people could earn frequent flyer miles and other bonus programs. Speech freshman Dana Cohen said she would “absolutely” be in favor of a credit card tuition payment option.
“I use my credit card for everything,” Cohen said. “I get frequent flyer miles from my card; that’s why I use it all the time (for non-tuition expenses).”
Other students said such perks would be nice for parents, but for students the accompanying risk of debt is too great.
“I think it’s wise for a parent to pay with a credit card if it would benefit them and they can pay it off each month,” said Rachael Tripp, a Weinberg senior. “But financially it’s just too great a risk for students to be charging large sums.
“I would not do it. Even if we had the option, I wouldn’t do it.”
Administrators at the University of Washington share Tripp’s anxiety. “Our big concern, of course, is that we don’t want students running up debt,” Johnston said.
Nellie Mae, a student loan agency, found that undergraduates with credit cards had an average credit card debt of $2,748 in 2000.