A third-year business student at the University of Alberta has found a way around the university’s new policy that bars students from paying tuition fees by credit card.
U of A cancelled the option to pay tuition by credit on March 31, 2009 in an effort to save $1.3 million annually. But, when student David Murray’s company Pay4U opens for business in December, students will once again be able to pay with credit cards without the university losing profit.
“Some people use [a credit card] for the rewards, some people use it because they don’t have the cash available to [pay tuition], and some people do it to develop that future credit rating that they’ll need to buy a house, get a mortgage,” Murray said.
Murray and a couple of his friends are set to launch a third-party website, Pay4Unow.ca, Dec. 4. Students will be able to pay this company the amount of their tuition via credit card and, for a small fee, Pay4U will issue the U of A a cheque on behalf of the student, thus restoring the credit card option.
In a statement in U of A’s campus newspaper the Gateway, Ron Ritter, the university’s director and treasurer of financial services has said the new site is not affiliated with the university.
“We are not endorsing or behind this in any way, shape or form,” Ritter said. “We are aware that there’s initiatives like this out there, but we are reluctant to enter into any sort of sort arrangement with them because we know there would be additional service fees for students, even though they are voluntary in nature.”
“When I talked to [Ritter], he made it very clear that in order for me to move forward with this I had to state that I was a separate entity from the U of A,” Murray said. “They are not allowed to offer any endorsement what-so-ever to a third-party payment system.”
Although students using Pay4U will have to pay a service fee, Murray said there will be very little profit involved. The 3.39 per cent the site charges pays for the company’s risk, site maintenance, bank and credit card fees, he said.
“We are not here to be making a bunch of money for ourselves. We are here to provide a service,” Murray said.
Although legally this is a touchy situation for U of A, it allows the university to tip-toe around credit-card related service fees while students retain the option to pay by credit card.
Murray said due to the company’s lack of affiliation with the university, there are some fears over security issues concerning the website but that these fears are unfounded.
“There are different levels of security certification you can get, and I thought that if we were going to provide this to students, we would have to go to the max,” he said. “I have no qualms or doubts that our site is going to be as secure as it could possibly be.”
Alvin Lee, a second-year science student at the U of A, said he would trust the website.
“I’m sure it would be safe,” Lee said. “The thing with credit cards is you have to go through all this fine-tuning with paper work. . . . I would have no problems using it.”
U of A is not the first academic institution to cancel the credit card option. University of British Columbia recently cancelled tuition fee payment by credit card and other institutions have never allowed credit card payment. This opens up a large client base for Murray and he said he would like to eventually expand his new company.
“We are doing it here in the University of Alberta to figure out what our best practices will be . . . to make sure that our system is as flawless as possible so that when we expand we do it without any hitches.”
So far, Murray said he is trying to stay low key. The company has its own Facebook profile and is getting new fans everyday, but Murray said he doesn’t expect his service will gain every student that used to pay by credit card. Still, he said he believes the need is there and it is important to provide the option.
“We are out to find the students that need this option and that want this option,” Murray said. “We provide it for a fair rate.”