Alum offers plan to charge tuition bills

The 5.5 percent increase in next year's undergraduate tuition may have some students' parents in a panic. But one parent has come up with a way to get a little something extra in return for paying $28,096 in tuition, room and board. College of Arts and Sciences and Dental School alumnus Stuart Siegel, whose daughter is a College sophomore, is proposing a plan to the University that would allow tuition bills to be paid with credit cards. "This proposal would cost Penn a minimum amount of money and would allow students to earn free airline mileage that would let them go home more often or travel during the year," Siegel said. But when Siegel wrote several University officials last year with the proposal, the response was unfavorable. Siegel explained that administrators told him the University would have to raise its tuition rates to match the surcharges levied against it by credit card companies. These charges range from one to three percent of the total transaction. "This would only bring the benefits to a small number of people," Siegel added. Vice President for Finance Stephen Golding said the cost is not an insignificant factor, adding that there is always the possibility of people building up their credit card debts to an unmanageable degree. "We periodically take a look at the possibilities of credit card payments, and we are continuing to question it as an effective way to handle bills," Golding said. "But even though we have the capacity, there are still many issues to deal with." Many schools around the country, including Duke, Hofstra and Adelphi universities, have already implemented a system that allows bills to be paid by credit card. Siegel contends that the plan would offer big benefits to people who travel long distances to come to Penn. To offer a program allowing students to earn airplane mileage, the University would have to sign on with an affiliated credit card, such as an American Airlines Visa or Mastercard. Senior Director of Financial Services John De Long said if the University did not raise its tuition, it would suffer from the approximately 1.5 percent less tuition received from those paying with credit cards. "Many people don't even have the proper credit line to make such a large payment," De Long added. "It's not fair to the other students." De Long pointed out that the University did allow night school students to pay with credit cards seven years ago, although the University was not affiliated with a bank. This program was cancelled due to lack of interest. "Penn is worried about the effect of an added interest charge by the credit card, but chances are that the credit card companies may offer incentives to get business for such a program by offering Penn a very low rate," Siegel said, adding that it would be very advantageous for the companies to target higher income groups. But De Long said the costs outweigh the benefits, adding that "there's really no incentive for a private institution like Penn to adopt a credit card payment method."