Buy now: pay more later

To cover the cost of providing the option of paying bursar bills by credit card, IU will likely add a 2 percent fee for students who choose to use this method of payment beginning next semester.\nThe measure needs to be approved by the IU board of trustees before it is enacted.\n"That number I think is a reasonable, rational one," said Vice Chancellor Maynard Thompson. "That's what it takes to cover the administration of the service… We're certainly not intending to (profit from the fee)."\nBloomington Chancellor Sharon Brehm gave two reasons as to why the University is proposing the new fee.\n"Number one, we can redirect money from administrative services into the academic mission -- teaching, research, etc.; and number two, only a portion of our students were benefitting from the previous arrangement, so there's a question of equity," she said.\nLast year, providing a credit card option cost the University $1.5 million and is projected to cost about the same this year, Thompson said. He said in the past the University bore this cost, which took funding away from academic programs. \nThis was not fair to students who did not pay their bursar bills by credit card, Thompson said.\nThe two percent "tax" includes all transactions that have a credit card option.\n"It impacts the students differentially," he said. "Students who don't charge their bursar bills don't benefit by incurring those costs. If a student chooses to proceed that way, the cost should be charged to them."\nFor students worried about the new fee, the University will change the payment deferment plan as part of the proposal. \n"There's two aspects of the credit card proposal," Thompson said. "One is a goal to provide resources to the academic units that will benefit all students. As it stands, the University is incurring costs for only a portion of the students, and from our perspective, there's an equity issue there. \n"The other part is we feel there's a need to offer a plan to defer payment for portion of their instructional fees."\nThis semester, students who did not want to pay their entire tuition bill in August had the option of deferring 60 percent and paying the balance in October for a $24 fee. As proposed, this deferment would remain, but students would have the additional option of deferring half of the remaining balance for a $12 fee.\n"Those fees are set to enable the University to break even from an interest income standpoint," Thompson said. "If students pay those fees in August, then the University can break even."\nIU is one of only two public schools in the Big Ten that allow students to pay their tuition and fees by credit card. Penn State charges a flat fee of $45, but students can only pay by credit card online, said Leann Rossman, office manager for the Office of the Bursar at Penn State.\nThe plan has been in the works at IU since May. Last week the Finance Committee of the IU Board of Trustees looked at the proposal. Thompson said they are very close to making their final decision and he said the committee seemed supportive. If passed, the proposal would go into effect in November, in time for next semester's tuition bill.\nThere are no changes proposed for other bursar bill fees, Thompson said.