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When students pay bills with plastic, their cost will go up 2.9 percent in January
By Carol Biliczky
Beacon Journal staff writer
Published on Wednesday, Oct 29, 2008
While a tuition freeze is in effect at public colleges statewide, many Kent State University students still will see their bills rise 2.9 percent in January.
The university is shifting the convenience charge assessed by credit and debit card providers to students who pay with plastic. The university currently absorbs the fee.
The change is part of a university-wide cost-cutting effort that KSU President Lester Lefton unveiled in an e-mail to faculty and staff members Friday.
''It is nothing less than imperative that every university unit mirror the kind of changes that are occurring in most American families — from buying in bulk to postponing major purchases,'' he wrote.
Lefton suggested staffers send e-mails instead of letters, arrange teleconferences instead of trips and simplify or go without special events.
''I can assure you that the university's leadership team is doing the same as we put every aspect of university finances under the microscope,'' he wrote.
Other tax-supported universities also are cutting costs because of the economic down
turn, he said.
For example, the Northeastern Ohio Universities Colleges of Medicine and Pharmacy in Portage County has canceled raises that were to go into effect in January, spokesman Mark Bosko said.
Miami University has suspended capital projects and instituted a hiring freeze.
Kent State's approach will mean bigger bills to some students, though.
The new system is part of a paperless billing system that the university will start with the spring semester. All bills will be e-mailed to students.
Full-time undergraduates on the Kent campus who pay with plastic will be charged $122 more a semester. Those who use plastic to pay for room and board will pay perhaps $131 more, depending on their residence hall and meal plan.
Last year, students made almost 55,000 transactions on credit and debit cards, KSU spokesman Tom Neumann said. Because some students made more than one transaction, the figure doesn't represent the number of students.
The university paid about $1 million in convenience charges for the students, he said.
''That's why it's necessary to do this,'' Neumann said. ''When you combine it with what other universities are doing [by passing the fee along], it puts us at a big disadvantage.''
Bowling Green, Miami University, Cleveland State, Ohio University and the University of Toledo are among those that pass the convenience fee on to students. The University of Akron, Youngstown State and Stark State absorb the cost.
All state universities agreed to freeze tuition for the 2007-08 and 2008-09 school years in exchange for more money from the state.
Neumann said the new charge does not represent a hike in tuition. The current system was not fair to students, he said.
''Those who were paying cash were subsidizing those who paid by credit card,'' he said. ''The ones paying cash were paying the full price.''
Students can avoid paying the convenience fee by paying their bills in cash or by personal check, money order, cashier's check and a check issued by a credit card company.
Kent State doesn't receive any of the convenience fees charged by credit or debit card providers.
Carol Biliczky can be reached at 330-996-3729 or cbiliczky@thebeaconjournal.com.
While a tuition freeze is in effect at public colleges statewide, many Kent State University students still will see their bills rise 2.9 percent in January.
Get the full article here.
Comments
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Anti-Politically Correct & Anti-GOP, OH
Posted 06:04 AM, 10/29/2008
Just another way to scam.
Dalton Ave, Henderson, NV
Posted 06:22 AM, 10/29/2008
Good for Kent State. The only people who pay with plastic are parents who want to pad their frequent flier miles.
- Uncle Ed
Posted 07:56 AM, 10/29/2008
I disagree that KSU's payment of the "convenience fee" for students puts KSU at a disadvantage. I believe the opposite is true - students may prefer to addent a school that saves them this cost. I can only hope that KSU students collectively take some action to punish this type of behavior from a state-owned and taxpayer-supported institution.
Posted 08:10 AM, 10/29/2008
''Those who were paying cash were subsidizing those who paid by credit card,'' he said. ''The ones paying cash were paying the full price.''
Where does that kind of logic come from? That statement implies that the card paying individual gets a discount!! Both are paying the same price!!! The only difference is that those paying by credit card have to pay extra (not less) because they have to pay the interest and fees on the use of the card. Thus, the cash paying student actually pays less!!!
Hey uncle ED, read the friggin story completely before you make another arse of yourself!! The article states that even debit card users (students) have to pay the additional 2.9%. Thus, once again the banks will make out on thisd one as they charge you for the check transaction fee or the teller/ATM fee for withdrawing cash.
Appears to me that Lefton must be sleeping with the bank lobbyists. "Hey Pres Lefton, there's banker goo on your lapel"
Posted 08:14 AM, 10/29/2008
This is so wrong on many levels, it will only get worse.
Akron, OH
Posted 08:15 AM, 10/29/2008
It's against federal law for a business to assess a different fee for customers who use credit cards. I wonder how these universities get away with it.
Akron, OH
Posted 08:46 AM, 10/29/2008
Albert, you cannot read. All the students were subsidizing the costs of the students doing transactions with credit cards as KSU was covering those costs, which came from the pool of money collected from all transactions. Now the students causing the fees (credit card paying students) are paying those costs directly and not the rest of the student body.
You have no idea how the bank industry works. Kent State was already being charged this 2.9% credit card processing fee. Now, the student causing this fee to be occurred will pay for it.
This is already a common practice in some areas of the United States. Go to California and it is cheaper to pay for gas by cash than credit card. The reason - the gas station passes the credit card processing fee on to the consumer.
The banks are not making any additional money on this. They already get paid the 2.9% now. It is saving KSU money.
Dalton Ave, Henderson, NV
Posted 08:48 AM, 10/29/2008
@Albert -
First, you sound angry. You should calm down.
Second, the quote you refer to makes perfect logical sense. Please allow me to explain it. You have two students who owe $100 for classes. One pays $100 in cash, where $100 goes to the university. The other pays $100 with a credit card, where $97.10 goes to the university and $2.90 goes to the credit card company. Thus, the second student is paying less to the university, thus attending school at a discounted rate. The new policy will have the credit card student paying $102.90, where the full $100 goes to the university.
* please note that I do not account for any interest charges on the credit card as most people who pay for school with plastic are only looking to pad their rewards program and will pay the entire bill when it comes due.
Third, I have no clue where your statements directed at me are coming from. If I get cash from my bank or ATM I am charged no fees. If I write a check, I am charged no fees. If I get a certified check from my bank, I am charged no fees. If you are, I suggest that you get a new bank.
Thanks - Uncle Ed
Akron, OH
Posted 08:49 AM, 10/29/2008
Beta, where do you get this idea? It is a common practice. I has seen it at stores and gas stations, where the credit card processing fee is charged to the consumer rather than the company paying it. It keeps costs down for the cash paying consumers. It is not a new practice.
Dalton Ave, Henderson, NV
Posted 08:54 AM, 10/29/2008
@Betamax - This is very common. I would like to see the Federal Law that forbids the practice. Please provide a link, title, code... some way to direct people to find the law.
If what you say is indeed true, I believe the workaround is to offer a "cash discount".
Thanks - Uncle Ed
Akron, OH
Posted 09:09 AM, 10/29/2008
Ed, I would not go this far: "please note that I do not account for any interest charges on the credit card as most people who pay for school with plastic are only looking to pad their rewards program and will pay the entire bill when it comes due."
This might be true if parents are paying the bill. But you would be shocked how many students put them selves through school by credit card. It is more common than you expect.
Dalton Ave, Henderson, NV
Posted 09:29 AM, 10/29/2008
@Brian - that is a discussion outside of the scope of the example I presented, which is why it was included... to set the scope of discussion.
Akron, OH
Posted 10:07 AM, 10/29/2008
@Ed - But, have you seen your view documented any where, specifically that "most" who pay college tuition with a card will pay it when the bill comes due? It is in total contrast to every documented trend we have seen on how Americans (and especially students) are using credit cards the last few years.
Bath, OH
Posted 10:14 AM, 10/29/2008
I would be surprised if Kent State University is actually paying their credit card processing company a 2.9% fee for processing each purchase. The fee charged by the merchant processing company varies by the volume and the average ticket size submitted by the merchant (KSU). As a small merchant with a very small volume, I pay 1.9% to the credit card processing company! If KSU is actually paying 2.9%, then they should look for a new processing company!
Dalton Ave, Henderson, NV
Posted 10:27 AM, 10/29/2008
@Brian - all of the trends I see are people using credit cards to pay for "things" not education. Those who use credit cards to pay tuition, typically pay the balance off with a student loan that is payable directly to them. I have done it before, so have many others I know.
This new policy closes the loophole.
Posted 11:07 AM, 10/29/2008
They won't be able to accept Visa cards, though. Collecting a convenience fee as a percentage of payment (e.g. 2.9%) is against Visa regulations, so they're doing the next best thing...just not accepting Visa...
Posted 11:52 AM, 10/29/2008
Actually, this IS a Visa/MC violation. I currently work in the merchant bankcard dept at an area bank. I urge anyone this is effecting to please contact your credit card's merchant bankcard dept and make them aware of this. It is unlikely that KSU is being charged 2.9% anyways - that seems a little steep. That fee is what businesses are assessed in order to have the convenience of taking credit cards - it gives them the ability of greater sales, therefore is cost-effective. If enough students make their credit card's issuing bank aware of this, KSU will be advised to stop this practice or they will lose their ability to accept VISA/MC.
Posted 12:41 PM, 10/29/2008
Well, the bottom line is money. KSU wants more of it.
Posted 01:36 PM, 10/29/2008
scam scam scam.
CUYAHOGA FALLS, OH
Posted 01:54 PM, 10/29/2008
I work for a bank in the Merchant Services Department and I know that charging a "fee" to recover merchant processing costs is against the law. Kent State should be ashamed that they are gouging the students for their "cost of doing business" with Visa and Mastercard. The interchange rate charged to the University is based on dollar volume. The larger the volunme, the bigger the discount. How can anyone be sure that the proposed amount is a fair one? It is a tough situation when students or parents have to charge some or all of the tuition and are already accumulating interest on the payment due. So much for giving the students a break. I will think twice before sending my grandchildren to Kent State.
I support calling the Attorney General's office about this immediately.
Posted 03:18 PM, 10/29/2008
KSU's "leadership team" is vastly overpaid and underworked, in contrast to students, faculty and staff. Lefton needs to have his bloated salary cut at least in half as do the other fatheads that run this institution (into the ground).
Posted 04:28 PM, 10/29/2008
Everyone who has a credit card needs to read this...
Here is a French journalist's view of American credit-card addiction:
"Credit Cards: The Plastic Trap"
Thursday 23 October 2008
by Dominique Nora, Le Nouvel Observateur
http://www.truthout.org/102808E
Akron, OH
Posted 05:19 PM, 10/29/2008
The people that are saying it is against the law, I would love if you post the law saying it is illegal. It growing practice among universities. I have seen store and gas stations outside Ohio that do it regularly. I have personally paid for a professional conference with a credit card and was passed on the processing fee.
Posted 07:41 PM, 10/29/2008
Brian
Here is the information you requested http://usa.visa.com/download/merchants/visa-usa-operating-regulations.pdf
Please refer to sections 5.2.E and 5.2.F where it states merchants may not add a surcharge to transactions (with the exception of travelers cheques and foreign currency fees), it also states that a merchant cannot impose a fee UNLESS the fee is a bone fide 'convenience fee' for taking a payment type OUTSIDE of their normal payment types - and then ONLY added to NON FACE TO FACE TRANSACTIONS, and MUST not be added to recurring transactions (which would then make it a normal payment type).
Yes, it may be a growing practice - because a majority of people havent been educated in VISA/MC rules and regs. I only am because of my career - I have been to many VISA/MC conferences and work directly with business and their processing accounts. What gas stations are doing is offering a 'cash discount' - you paid a bit less if you give them cash. You arent paying more than what you owe for using a card - you're paying less than what you owe for paying with cash. I hope the above info helps
Akron, OH
Posted 07:55 PM, 10/29/2008
Thanks, Liz. This is not a "law" though as some keep suggesting.
Akron, OH
Posted 08:02 PM, 10/29/2008
Kent State is also not accepting Visa, so this document does not apply.
Posted 08:11 PM, 10/29/2008
"Kent State is also not accepting Visa, so this document does not apply."
HUH? Clearly they are accepting VISA, that was the basis of this article........Im not sure what your statement is talking about.....
Akron, OH
Posted 08:17 PM, 10/29/2008
Liz, learn to read. Visa was not mentioned once in the article, so how can it be the "basis of this article"?
They are NOT taking Visa. See: http://www.kent.edu/bursar/Important-changes-2008.cfm
Posted 08:24 PM, 10/29/2008
But they are taking 'CREDIT CARDS' - right??? So, i can assume MC and DC? Yeah, they all have similar regs - they can be found in their reg. manuals as well. I provided the easiest one for me to provide at the moment. Feel free to do some research on your own.....
Akron, OH
Posted 08:35 PM, 10/29/2008
Clearly they do not have the same requirements as stated at the Kent State link I posted. I also question you work status as you make such a point saying this is your job, yet so far the information you posted does not prove it is a law or that it is even relevant to this situation. You also keep grouping VISA/MC together as if they are one and they have very different merchant policies.
Akron, OH
Posted 08:36 PM, 10/29/2008
How can someone work in a situation where this is their job and just assume (and not know) that all the credit cards have very different policies?
Posted 06:52 AM, 10/30/2008
MEMO: Credit cars are being frowned upon nationwide. In California the major gas station ARCO only takes cash because the fees are too high. The lenders are crippled from all of there cardholders going bankrupt. Plus: Unless you are in nursing or fashion design a degree from Kent is pretty worthless anyhow. Just put that you graduated from KSU on the bottom of your resume and get in line to make $32,000 per year!
Posted 08:31 AM, 10/30/2008
Judging by the ignorance and cluelessness of most of you (Betamax, Liz for example) slamming KSU for a business decision that many other businesses do, shows you weren't smart enough to go to college.
Any chance some of you uneducated ilk to slam either UA or KSU is pathetic. You probably just scraped by to graduate high school.
Now, get back behind the counter and take another order.
