Facts About Tuition Payment & Credit Cards

Background
Paying tuition on credit is not a brand new concept. Since the advent of plastic, colleges and universities have accepted charge cards as a viable method of payment. While it's risky, many parents see the cost of their children not likely to college as being higher than paying extra interest on charge cards.

Fees
Fees not only affect those carrying college tuition balances on credit cards--they also affect those getting the funds. Credit card Education companies have increased deal fees for tuition payments dramatically. The University associated with Eastern Michigan, for example, shelled out over one million dollars in merchant fees only for taking tuition payments on credit cards.

Size
Based on a 2007 study by the National Association associated with College and University Business Officers, there has been a 12 percent increase in charge card tuition payments since 2003. This reflects the rising cost of education and the rather sluggish rise in earnings in the usa. In addition, according to a 2006 study through the American Council on Education, one in four students has used credit cards for tuition.

Effects
The increase in fees and charges on charge cards has a long-term effect, too. Students can get buried in credit debt while earning no or low-wages while enrolled within school. In addition to tuition on credit, some students use credit cards to pay the bills while enrolled. In the worst cases, students exit college with hefty credit card debt (often with high interest rates) and large student education loans.

Transaction Costs
In an attempt to limit their own expenses, colleges take one of two measures: stop accepting credit cards as a kind of payment or adding convenience charges on top of tuition payments (often up to 2. 75 percent). This helps universities defray the price of simply making the transaction. This has a negative impact on the student or parent--it adds a substantial add up to the already high tuition payment.