APU scraps credit card payments

Credit Card 4.jpg

Junion psychology major and resident advisor in University Village, James Rohwer attempts to pay with his credit card
Photo by Kayla Landrum

APU will no longer accept credit card payments for tuition, room and board beginning July 1, 2014, after spending $1.8 million during the last fiscal year on credit card processing fees alone.

“We’ve been having this conversation for probably two to three years at the Finance Committee level and the Budget Committee level as this number has continued to grow,” said Bob Johansen, APU’s senior vice president and chief financial officer. “What’s key is that we are after affordability for our students and trying to deliver an excellent academic experience for them, and this is an expense that was directly going to an outside vendor called the bank. It was not helping the education process at all.”

Johansen’s name is signed at the bottom of the email sent to all students Monday on behalf of the Office of the President to officially announce the new policy change. He chairs the Budget Committee and said they proposed the policy change to the Office of the President, which is made up of senior administration officials.

Johansen said the amount of money the university spends each year on credit card processing fees has increased over the past several years due to a growing student body and increasing budget.

“We felt it was time to control cost,” he said.

The policy change affects all students, including those undergraduate, graduate and online. International students are exempted, however, because they do not qualify for federal aid and have fewer banking options.

APU is charged a 2.75 percent fee for every credit card transaction, according to Johansen.
With a $31,416 price tag for 2013-14 full-time undergraduate tuition, APU will give up more than $800 for every student who uses a credit card to pay his or her tuition, not counting scholarships or financial aid.

One Stop Director Angelina DiClaudio said in One Stop’s most recent analysis, they found that 67 percent of the student body uses a credit card for some type of payment.

“We understand the impact this has and we know it’s hard,” she said. “So we’re hoping this additional time we’re affording is also giving our students and their families a chance to look at options.”

DiClaudio and Todd Ross, executive director of One Stop’s academic and student financial services, visited SGA’s weekly open meeting Oct. 16 to tell them about the news before it officially came out and to get feedback, according to an SGA officer.

Students and their families have approximately eight months until the new policy kicks in. Once credit card payments are no longer an option, students and their families can pay for tuition, room and board with cash, checks, money orders, wire transfers and electronic checks via the CASHNet system.

Debit cards may be used in person at the One Stop office, but not online or over the phone.
It is not uncommon to see universities cutting out credit card payments to save on costs. While schools like Biola University still accept credit card payments, other private Christian universities in the area such as Vanguard, Westmont and Pepperdine have stopped accepting credit cards.

Many public universities have started charging convenience fees for credit card use. University of California, Los Angeles recently started charging students a 2.75 percent fee for credit card payments while CSU Pomona outsources credit card payment processing to CASHNet to cut down on “significant” transaction costs, according to the school’s “CASHNet FAQ” web page. Pomona students can still use credit cards to pay their tuition, but CASHNet charges them a 2.9 percent convenience fee for registration and tuition payments, according to the page.

However, APU cannot simply transfer the credit card fee to its students, due to a California law that prohibits private institutions from doing so.

“California law has put us in this position,” Johansen said, citing the inconvenience of the code, which is also in place in several other states, such as New York.

University of Southern California, a private university, still accepts credit card payments but changed its policy just this academic year for students following a payment plan, according to a Cashiers Office representative. Students on these optional payment plans are not allowed to use credit cards; instead, they are to asked to provide a bank account number for monthly automatic payments

Senior psychology major Stephanie Quan called the policy change “unwieldly,” citing worries over inconvenience and less secure payment methods.

“I think a credit card makes an easy, quick pay and it’s easier to pay that on time,” Quan said. “I don’t know what else they could do, though. If they can make the wire transfer on the bank accounts as easy to use as [the credit card system], it’ll be a pretty seamless transition. But if it’s confusing then they may be in danger of getting more late payments.”

Quan still has more than a year left until she graduates and has a credit card under her parents’ name to use for tuition, textbooks and emergency expenses. She does the actual administrative work of logging into the CASHNet website once a month to pay her tuition.

“I think it’s a good policy. I guess it’s not as convenient, but the thing is, they get charged for every credit card payment, so they could probably save money by not accepting credit cards,” said Livia Quan, Stephanie’s mother. “We’ll probably be paying by check [next year], so Steph will probably write a check and I’ll probably just pop money into her checking account.”

Johansen said officials are considering implementing some type of exception to the no-credit card policy for students near the end of their terms with low balances in their account. Specific details are still undetermined and the exception will be different for undergraduate and graduate students, according to Johansen.