Swarthmore Tuition Costs Students Extra $1,330 Annually, Says NYT Contributor

Editor’s note: This article was initially published in The Daily Gazette, Swarthmore’s online, daily newspaper founded in Fall 1996. As of Fall 2018, the DG has merged with The Phoenix. See the about page to read more about the DG.

In a New York Times op-ed published Saturday, Noah Bernstein, an education program associate at the New World Foundation, argued that monthly payment plans, like the one Swarthmore has in place, burden students and their families with “hidden costs.” He writes:

In the past, families and students covered their tuition with lump payments at the beginning of each semester. To ease the burden of such large bills — recent data shows that tuition and fees have increased 439 percent from 1982 to 2007 — many colleges have instituted monthly payment plans, while charging zero interest. Even many families that could afford to pay an entire semester upfront find such plans appealing.

Though such plans have undoubtedly allowed a greater number of modest-income students to go to college, they can actually end up unintentionally raising tuition costs. While the plans typically don’t charge a fee for payments made by check or direct deposit, they tack on a hefty charge for credit card payments.

Why? Because most institutions outsource the management of their plans to private companies, which have to make a profit. They charge universities a fee for processing credit card payments, and the schools pass those costs on to students and families, amounting to over a thousand dollars or more per year in some cases.

For example, some of the top liberal arts colleges in America, including Williams, Amherst and Wellesley, use a company called Tuition Management Services, where the fee is 2.99 percent for each payment made by credit card. At Amherst, where tuition, room and board cost $53,370, that’s an extra $1,595 if all payments are made by credit card. Even at Swarthmore, which runs its plan in-house, the fee is 2.6 percent, or an extra $1,330 a year (emphasis added).

This is a developing story; The Gazette has not yet sought comment from the Administration.


  1. I’m not sure I see a problem with this–Swarthmore, and every other place that accepts credit cards, needs to pay a fee to credit card processors. Square is making waves for offering a flat 2.75% fee–Swarthmore’s charge is well below that.

    Also, were I to pay for Swarthmore with my current credit card, I’d get 2% cash back. Where do people think that money is coming from? If I’m getting 2%, the credit card companies are sure as hell getting more.

    I strongly suspect that Visa/Mastercard/AmEx are the ones making a profit here, not Swarthmore–though perhaps TMS is making a modest profit on the side.

    There is a legitimate argument about the rapid increase in the cost of college, and is a debate that should be (and is being) had. But this is a bit of a red herring.

  2. So what?

    Anyone can avoid the 2% charge for using a credit card to pay tuition:

    Write a check.

    Why complain about what is simply a choice and a convenience for some people? Why is this simple fact forgotten?

    This article is simply an illustration of why an economics class should be a college general requirement. (And a requirement for every NYT journalist.)

  3. I’m unclear how an academic economics class would teach anything about this issue … ?

    Perhaps a “where the money goes” class would be useful, however, getting a sense of how all major

  4. Economics tells us that people change their behavior when incentivized to do so, as with an extra fee for paying with credit card simply causes them to pay with a check. That said, incentives only work when people know about them, so, while payment plans aren’t the center of the college tuition debate, informing people of the incentive to pay via check is also economically important.

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