The University of Prince Edward Island is the latest university in Canada to announce plans to disallow the use of credit cards for tuition payments.
The university expects to save $125,000 a year in transaction fees.
The undergraduate student union president Tim Cullen expressed concerns to CBC News that students may incur late fees university because of delays getting student loans. Under the current credit card payment system, it is possible for students to avoid late fees by charging to their credit cards and paying off the credit card balance with student loans.
While I normally agree with the concerns expressed by Cullen, the situation is not as black-and-white as it first seems.
UPEI is more reasonable than most universities (Not saying much, I know) in the country for student borrowers. Many universities punish students requiring student loans with “administrative fees” and high interest rates that probably make credit card companies blush. (See a chart of these fees at 27 selected universities here)
UPEI allows two weeks for student loans to arrive from the beginning of the semester. For most students, this is more than enough time to process and receive their loans. Many universities require payment prior to the beginning of the academic year and charge student loan recipients “late fees.”
While UPEI may be reasonable in this policy, it is clear that students unable to meet their deadline will be “SUBJECT TO LATE FEES AS SPECIFIED UNDER THE FEES SECTION OF THE UNIVERSITY CALENDAR” (emphasis is from university’s own form for students requesting permission for late payment.)
Instead of fighting against the university, the students’ union should be lobbying the university to use the $125,000 saved to waive late fees for students in financial need. Then, the new policy will be a win-win for the university and students. The university will save more money than it will use to “subsidize” students needing alternative payment agreements. Students needing extra time for payment will receive it without having to turn to credit cards to bridge them over.
While I commend the UPEISU for taking a stand on the issue, their energy may be better spent looking for a new solution for students who use credit cards instead of trying to hold onto the status quo.