UCLA students who use credit cards to pay their university bills better brace themselves: The university will start charging a 2.75 percent credit card processing fee this fall.
It's an example of how universities are passing certain costs along to students amid a statewide budget crunch.
Administrators say the move allows the university to stop absorbing the cost of processing credit card transactions – fees that credit card companies charge. Transferring that cost to the credit card-swiping students will save UCLA more than $6.5 million a year, they say.
But some students aren't as enthusiastic: The UCLA Undergraduate Students Association Council opposes the fee, saying it penalizes low-income students at a time when tuition and fees are skyrocketing.
According to a university news release, UCLA has allowed students to use credit cards to pay their tuition, fees, room and board, and other bills since 1994 without charging them a transaction fee.
The campus Restructuring Steering Committee decided this year that it was time to stop absorbing the extra cost. The committee was launched last year to find new ways to save money in an era of declining state funding to the university system.
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Steven Olsen, vice chancellor for finance, budget and capital programs for UCLA, said in an interview that the university couldn't justify paying credit card companies millions of dollars a year anymore.
He views the move as a way to spare academic programs from further cuts, and he hopes students will simply stop using credit cards to pay their school bills. Students who use cash, check or direct deposit to pay their BruinBills will not have to pay any extra fees.
"Our hope is that none of them will pay it – that what they will do is make use of the e-check facility, which will be a no-fee option, and if they don’t want to do that, they can send in a check," Olsen said.
That would represent big change: In the 2009-10 academic year, 79 percent of fees on student accounts were paid by credit card, a UCLA spokeswoman said.
The UCLA Undergraduate Students Association Council issued a press release opposing the new fee earlier this month, saying it would burden students who are struggling financially just as they are facing big tuition increases.
UC President Mark Yudof said last week that the latest round of budget cuts would result in a double-digit tuition increase for UC students – on top of the 8 percent tuition increase already approved for next year.
"If you don’t have the money in your account, you can’t use a check," said Adam Swart, chief of staff in the office of the student body president. "This unfairly disadvantages people at the lower-income levels. This is not the time to put another cost on the table."
The amount of each payment on UCLA student accounts varies because some people pay monthly and others pay quarterly, a spokeswoman said. For the average payment of $600, a credit card fee would total $16.50.
Swart, a political science major, said he and most of his friends pay their BruinBills with credit cards. Some enjoy the flexibility of paying later. Some like not having to worry about having all the funds for their tuition bills in their checking account on the due date. Swart also likes racking up airline miles by using his credit card. But he said he'll probably switch to paying by check once the fee takes effect Aug. 1.
In an interview with the Daily Bruin, Student Financial Services Director Marsha Lovell said UCLA is one of the last universities that does not charge a credit card processing fee.
It's unclear exactly how many universities charge the fee in California, but the practice is not universal.
Stanford University used to charge a 2.75 percent transaction fee to students who used credit cards to pay bills. But a call to Stanford University's student financial services office revealed that the university stopped accepting credit cards as payment because the fees were too high for students.
USC does not charge a fee to students who use credit cards to pay their university bills online. As private universities, however, Stanford and USC charge higher tuition than UCLA.
The California State University system charges a fee when students pay for their tuition with a credit card. The fee varies with the market rate. It is currently set at 2.9 percent but will soon drop to 2.75 percent, said spokesman Mike Uhlenkamp.
A spokeswoman from the California Community Colleges did not return a call requesting comment.