Here’s a new reason to take a look at all those credit card applications in the mail.
The Office of the General Counsel and the Office of Student Finance completed contract negotiations with American Express, MasterCard and Discover in April to allow students to charge tuition and fees to their credit cards starting this spring. But students won’t be able to pay with a Visa card.
The University currently allows online electronic billing for tuition payments. Students also may pay with cash or check at One Stop student services in Fraser Hall.
Rosalie O’Brien, associate for the General Council, said credit card contract negotiations came at little or no cost to the University.
During negotiations, University officials insisted that students, not the University, will pay fees associated with using a charge card, O’Brien said.
Kris Wright, Office of Student Finance director, said payers will be notified of the fees before transactions are completed.
A processing cost will be covered by a contracted third party and students who use credit cards will be assessed a 2.75 percent fee, Wright said.
Average undergraduate tuition and fees for a Minnesota resident total $4,705 per semester, Wright said.
She also said the service fee of 2.75 percent will equal $129.39 for the semester’s average tuition and fees bill.
Wright said the University expects 10 percent or fewer of students to use a credit card to pay tuition. The most popular form of payment still will be checks – either e-check or a physical check, she said.
Slightly less than 24 percent of undergraduates reported using credit cards for tuition, according to a Nellie Mae 2004 study on undergraduate credit card usage and trends.
Wright said there are risks involved in implementing any new payment program.
“The credit card process needs to be developed, the Web site tested and the reconciliation process completed,” she said. “We will do extensive testing to ensure that all students are able to use the system effectively and efficiently.”
The Office of Student Finance is working to offer the option because it will make payment easier for international students, nondegree students who are required to pay tuition in advance and parents of traditional students, Wright said.
Shail Bhatnagar, Minnesota International Student Association president, said international students often have to deal with wire transfers tagged with fees. But he warns they “may not be aware of the full benefits or full consequences of having a credit card.”
“It’s a good backup idea for students who don’t qualify for loans or students that forget to fill out the FAFSA, but it’s almost unadvisable for students to use credit cards to pay tuition,” Bhatnagar said.
Bhatnagar said he generally uses his credit card to pay for groceries or small things.
“If I were talking something as big as a tuition bill, I would probably apply for a loan at a bank,” he said. “As a worst-case scenario, it may be a good little backup option.”