Ever-rising costs of processing credit and debit cards as a payment option for tuition and fees prompted Manhattan College to develop a new policy that now associates a convenience fee with these transactions.
Manhattan College’s online payment provider is TouchNet®, an independent third party contractor who has provided services for the College’s online Student Account Suite and online payment platform since the 2016-2017 academic year. Touchnet’s PayPath service processes credit and debit cards and collects the non-refundable processing fee directly from the student after prompting the payer with their processing policy four times throughout the online transaction.
A convenience fee is the merchant provider’s cost of processing credit cards and debit cards via the payment networks of Visa, Mastercard, Discover and American Express. The fee covers how much the transaction of the online payments costs.
Lisa Juncaj, director of Business Systems, pointed to several factors that prompted the institution of the fee.
“These processing costs had become a significant annual expense for Manhattan College and we have been keeping a close watch since 2014 on both the rising expense and how other colleges and universities have been responding in allowing credit and debit cards as a payment option for tuition and fees. To keep our education as affordable as possible, students and families who now opt to use credit or debit cards as a tuition payment method will have the costs of processing tied to their transaction so as to avoid spreading the cost and fees of processing to all students in the form of tuition and fee increases,” said Juncaj.
The non-refundable convenience fee is processed by PayPath at the established fee of 2.85 percent of the transaction amount or a minimum of $3. The fee is assessed and paid to PayPath who retains the fee in full; the College does not receive any of this fee.
Fees in the industry are determined by general operating costs, the cost of adhering to industry standards for data safeguarding and the costs of keeping up with card rewards and perks programs offered by the credit card companies. According to Juncaj, no current information suggests the PayPath fee will be increased.
Other institutions, such as Pace University and Quinnipiac University, extend the convenience of allowing students and families to use card payment options. However, they pass the convenience fees to the payer. Some colleges, like Fordham University, Fairfield University and New York University have stopped accepting credit cards altogether for payment of tuition and fees.
Other payment options are available to families without any service cost and are processed in a safeguarded way. Students and families can make in-person and mailed-payments with cash, money order, personal check, bank check, scholarship checks, 529 savings plan payments and international payments via Western Union. They can also make online eCheck/ACH payments via checking or savings accounts via the Student Account Suite.
After reviewing data from the period of July 1st to September 10th and comparing it to data in the same timeframe from Fall 2018, there was no decrease in found in the payment amounts or number of students who have made payments to their student account for the Fall 2019 semester.
While students are still paying the same amounts in the same periods, payment methods did change. Credit card payment amounts have decreased by 65.8 percent and ACH payments, or eCheck payment amounts, have increased by 42.2 percent.
According to Juncaj, the school found an increase in the number of families who are participating in the College’s Monthly Payment Plan (MPP) option to pay the term’s bill in monthly installments. Payment plan participation has increased 40.5 percent with 565 families on the plan in Spring 2019 increasing to 794 plan enrollments in Fall 2019.
There has been no notable change in amounts or number of families who have borrowed a Federal Parent PLUS Loan.
While the fee came from a carefully factored and determined place, some students were still affected by the new fee.
Sophomore international studies major Hailey Pena shared her thoughts on the new convenience fee.
“Around the time my tuition billing statement came out, I had lost my job due to unsafe conditions in the workplace and money was tight. I was unaware of the new fee. This added on to my existing stress when it came time to actually make my payment. Although it was not that much extra that I needed to pay, it was still an additional expense. To avoid the fee, I ended up paying my tuition late and then got charged for the late fee. I just wish they would have notified us sooner rather than later of this change because you never know someone’s situation and what they are sacrificing to attend this school,” said Pena.
The Office of Student Accounts and Bursar Services has received feedback from families about the new convenience fee.
“Our office received a few dozen calls to confirm the new payment method policy that was included in our semester billing message that is emailed to all students and to parents who provide emails on the FAFSA financial aid application form. In most of the calls, parents shared that they knew this decision would be coming as someone eventually would be paying for the rewards and perks they receive as cardholders,” said Juncaj.
She continued.
“We additionally received a few letters from parents who were not happy with the decision and they received a written response that described the reason for the change in policy. We appreciated learning of these shared opinions and having the opportunity to explain all that was involved in this decision. Ultimately, everyone has been very understanding of our response to the rising costs of the payment processing industry and understanding of everyone’s shared role in making sacrifices of convenience to keep tuition costs down for the entire community,” said Juncaj.
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