College Passes ‘Convenience Charge’ onto Students

By ANTONIETTE PEMBERTON

The City University of New York implemented new tuition payment policies for students this semester. Students will incur an additional 2.65 percent “convenience charge” should students pay their tuition with a credit card. 

The new rule will shift a cost formerly paid by the college to students. City College was spending $300,000 a year on credit card service fees, said Richard S. Metz, Vice President for Finance and Administration, with the college.

The charge is a “further inducement to students to not use credits cards,” Metz said.

The change took place August 5, 2008. The college said it did not yet have any statistics showing whether the new policy dissuaded students from using their credit card to pay their tuition.

City College provides students with a number of options to pay their tuition. From federal and state aid to varying out-of-pocket options. While the new policy will save the college money, for students that have little choice but to pay for tuition with a credit card, it will make an already expensive financing tool more so.

Interest rates on credit cards range anywhere from nine percent to 28 percent depending on the person’s credit history. Metz says students tend to pay a card’s monthly minimum. If students took out a student loan their interest rate would be much lower, ranging from six to eight percent.

For a student enrolled full-time at City College, using their credit card to pay would cost them an additional $59. For international students who pay higher tuition rates, the additional costs could total hundreds of dollars more.

Although, the 2.65 percent may act as a deterrent for some, some students feel it’s unfair.

“It’s no point to charge more,” say Gisselle Guzman, 24 a City College sophomore. “We pay too much for school.”

Guzman paid her Fall 2008 tuition with her debit card, before the change became official policy, and will use a different method of payment for Spring 2009, because “they will charge me too much,” she said.

Pedro Rivera, 23 a City College senior, uses Academic Management Services, which is a tuition payment plan service for students who chooses to pay out-of-pocket in small payments as opposed to the entire lump sum. He said he paid his tuition in installments with checks.

Rivera, who works part-time, opts for this form of payment.

“I could do it without taking out loans,” he said.

City College administrators may think loans are better for students, but when a student has an exorbitant amount of debt or bad credit, tuition paying options become limited.

“They hurt,” said David Saget, 24 a City College senior, of his loans. Saget transferred from Monmouth University, on the New Jersey shore about 50 miles south of the city, with roughly between $20,000 and $40,000 in federal loans. He pays his City College tuition out-of-pocket to avoid adding to his existing loans.

Student who pay with a credit card, not only pays the upfront additional fee, but also the fees and interest rates associated with their card.

“The convenience charge,” said Guzman, “isn’t a convenience.”