Credit card concerns

“The University of Akron is making a few changes to its billing system starting Dec. 15 of this year. Starting on this day, when you pay your school tuition using a credit card you will be forced to do so on Zipline, which offers a new service through a company called CASHnet.”

The University of Akron is making a few changes to its billing system starting Dec. 15 of this year. Starting on this day, when you pay your school tuition using a credit card you will be forced to do so on Zipline, which offers a new service through a company called CASHnet.

This CASHnet service will now be the only way that a student can pay their tuition using a credit card and you will no longer be able to pay your tuition in Simmons Hall with a credit card, you will now be directed to pay your bill strictly through Zipline if you are hoping to use plastic. What’s the catch?
CASHnet now charges students a 2.9 percent service fee to use their credit cards online. When this was announced by the university, it was said that the 2.9 percent service fee charged to students would make up for the interchange fee that merchants, in this case the university, are charged when consumers, in this case, the student, use their credit card to pay their bill.

This seems to make sense. The university has to pay a percentage on your bill when you pay with a credit card, so charging the student a service fee so that the university doesn’t lose any money on credit card payments. While interchange fees can range from one to six percent, they typically run on the lower end of that scale and only average two percent per charge.

This means that CASHnet is charging you a 2.9 percent service charge fee while the interchange fee is usually a bit less. If you consider that the average student’s tuition – without financial aid and who doesn’t live on campus – to be around $4,500. If a student wishes to pay their tuition in full with a credit card they would then be charged over $100 in service charges. This doesn’t even include if you live on campus, which more than doubles your bill for the University of Akron.

CASHnet’s Web site advertises financial solutions for universities with multiple departments taking in money and trying to sort it out, claiming that their services will not only eliminate the issue of multiple departments taking in but increase the accuracy and accountability of the university. CASHnet even provides a case study using California State University.

However, if the interchange fee to the school is only two percent, then they are not merely making up for the money they lose on these fees by charging a 2.9 percent fee. CASHnet advertises that they aim to improve campus accounts and increase accuracy.

Are we, as students and the university’s consumers, paying the price for this increased accuracy? The old system used by UA seemed to be working just fine and it wasn’t charging extra hundreds of dollars to pay tuition when using a credit card.

If the university truly feels that this company will improve the student accounts then they need to find the funds for it, but charging its students hundreds of dollars to pay their own tuition when they are already broke is not necessarily the answer. We haven’t been able to really see the effects of it yet, but I have to wonder if this additional 2.9 percent service charge is going to affect students’ ability to afford attending the university.

Many students rely on their credit card to pay for their tuition, allowing them to pay off their tuition slowly throughout the semester and maybe even into another in order to afford and finance their schooling. This new service charge may change that and may affect students in a greater way than the university had expected.