If you paid this semester's college tuition bill by credit card, you may want to think twice when next semester rolls around.
Colleges charge an average fee of 2.62% on credit card payments for tuition, according to a new CreditCards.com report.
A small percentage of families pay tuition with plastic, but the fees add up as college tuition continues to rise, said Matt Schulz, senior industry analyst at the online credit card marketplace.
“The last thing anybody wants to do — when it comes to tuition — is to pay more than they have to,” he said.
The Web company surveyed 100 private colleges, 100 public universities and 100 community colleges from the continental U.S. in August. A total of 145 schools accept credit card tuition payments and charge an additional “convenience fee.”
Only 8% of the community colleges surveyed charge that fee, while 93% of public and 77% private institutions charge for credit card tuition payments.
Roger Williams University, a private liberal arts college in Bristol, R.I., charges a 3% convenience fee, the highest among the colleges surveyed. Saint Joseph’s University, a catholic school in the Philadelphia area, and Miami University, a public school in Oxford, Ohio, tied at 2.99%.
To be clear, those schools aren’t profiting from the convenience fee, Schulz explained. The fee goes to third-party service providers that process the credit card transactions. Schools, just like retailers, pay acquiring banks for the service. But unlike shops that can add the cost to the price of their products, colleges can’t easily raise tuition.
Tuition has already climbed straight up since the '60s, according to the National Center for Education Statistics. In the 2014-15 school year, an average degree-granting college charged full-time students $11,487 for undergraduate tuition and required fees. The average 1963-1964 tuition was only $508.
Most colleges disclose the convenience fee on their websites, said Schulz, and if not, it’s worth a call to find out.
This year, 2% of parents paid an average amount of $4,443 on credit cards for college, and 5% of students spent $1,615, according to a report by Sallie Mae, which helps families save, plan and pay for college.