Parents and students largely have pocketed their credit cards in favor of checks to make student account payments to the university, marked by an 87 percent drop in credit card payments on student accounts since the implementation of a convenience fee for those payments, according to data from the university’s financial services office.
In the 2010-11 school year, the year for which the most recent financial data from the university was available, 6.7 percent of student account payments were made by credit card, down from 51.7 percent of payments made by card for 2007-08, according to statistics provided by Associate Vice Chancellor and Controller Cheryl Wilson.
Wilson said the university began charging a 2.75 percent convenience fee after looking for a way to alter the amount the university was paying from processing credit card payments itself. The fee, charged to all tuition payments made with credit cards, took effect on July 7, 2008.
According to the website of the Vice Chancellor’s Office of Finance and Administration, a third party company, TouchNet, processes the online credit card payments for the university and charges the convenience fee of 2.75 percent of the total payment, or a $3 minimum fee, to the card user.
Wilson said that in 2007-08, the last year before the university adopted its current policy, the university paid more than $1 million in credit card processing fees.
Wilson said she did not know what the savings for the university have been since implementing the policy because she did not know how many people would have continued to pay with credit cards or what kind of fees the university would have incurred had the policy not been adopted.
“Clearly there’s an ongoing savings to the university as a whole when the university is not paying those credit card fees,” she said. “When the university was absorbing that, then it was only benefitting those who chose that [credit card] payment method, which even back then was only approximately 50 percent of the people.”
Corresponding with the drop in the number of credit card payments, the number of check or automated clearing house payments to the university shot up to 90.6 percent of tuition payments in 2010-11, nearly doubling from the 46.6 percent those payments comprised in 2007-08.
Wilson said she thought the reason for the drop in credit card payments and increase in check payments was the implementation of the convenience fee, citing a similar trend in other Texas private universities when they implemented a convenience fee as well.
Dan Mauck, a senior financial adviser at Clintsman Financial Planning in Southlake, said one reason for the decrease in credit card payments could have been due to the economic downturn in 2008.
With everything that happened in the U.S. economy that year, consumers, including families paying for college tuition, may have taken a message from that, he said.
“By and large, I think the unwritten signal to America was trim back on debt, put the brakes on spending where possible,” Mauck said.
Senior strategic communication major Joanie Swearingen said her parents used a credit card to make her student account payments because they thought it was easier than writing and sending a check to the university, especially because she lives outside of Texas.
Swearingen said she was surprised how much the number of credit card payments had dropped at the university and thought the reason for the decrease in credit card payments also could be in part because of the recession, not just the convenience charge.