In an effort to cut spending as much as possible, the University of Tennessee will no longer pay the service charge on credit card transactions for academic fees.
Most credit card companies charge a bank service fee, which the university has covered since credit cards have been accepted as a means of payment. Now, however, the school is attempting to meet the $15 million dollar budget cut, and feels it can no longer afford this expenditure.
Jeff Maples, vice president for the operations office, explained that by redirecting the credit card payment fees to students, the school believes that in the coming fiscal year, it can save approximately $900,000, which can be spent on academic and student support programs. Projections indicate that this number would reach $1 million by the following year.
"More people have been using credit cards for two reasons," Maples said. "The first is the use of our online payment system, and the other being because many companies offer promotions, frequent flyer miles and other incentives. As a result, the number of students paying by creditcard has tripled over the last two or three years."
This change will not completely end the use of credit cardsas a means for payment of school fees, however. A contract was agreed upon with First Horizon Merchant Services Inc. Payments will be processed by the company, and students using the service will be assessed a 2.5% fee.
"We realize that many students use credit cards for payment of their educational costs," UT Provost Loren Crabtree said. "I am happy we have found a way to continue this service."
Crabtree went on to add that there would be no change for students paying by check or cash. Students who elect to use the service and pay by credit cards may do so either by phone or online.
Some students were not happy about the increased fee on credit card payments.
"I cannot believe that the university would impose a fee like that. I make my payments on credit cards because I am paying for most of my education," Christy David, a senior in advertising said. "That is more money that I have to pay out of my pocket which places me in even more finincial strain."
Complete instructions on the use of the service are available at the Bursar office Web site (www.utk.edu/bursar/pymtmethods). Both the online and telephone systems are available Monday through Friday, from 8 a.m. to 8 p.m., and both accept Discover, Visa and MasterCard.
The change will take effect on July 1st, but will only affect the fee and tuition payments. Credit card procedures will remain the same for the UT Bookstore, ticket office and other retailers on campus.
"This is definitely going to benefit UT," Maples concluded. "Before, if you had to make a payment of, for instance, $1000 tuition, you would pay it to UT, and we would then be forced to take out of the service charge from that money. Now, however, the student will pay through this merchant service, we get all $1000, and you will simply get a bill for $1025."