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.