Universities Adopt PayPal and Venmo for Tuition Payments
Several universities are starting to allow students and families to pay their tuition using PayPal or Venmo. Among the first institutions to embrace this approach are Bellarmine University, Butler University, Kansas State University, Michigan State University, and Texas Tech University. More schools are expected to follow suit within the year.
It’s important to note that there will be transaction and processing fees involved, which can vary based on the university and the payment method chosen. Schools are integrating these payment options through platforms like Illumia, Nelnet Campus Commerce, and TouchNet, which facilitate tuition payments for many educational institutions across the country.
According to Don Smith, senior vice president and general manager of integrated payments at Ilumia, “A modern tuition payment experience needs to work for both sides of the transaction.” He explained that students and their families appreciate the flexibility to use the payment methods that suit their financial management, while institutions need options that fit within their existing systems. This integration aims to enhance the payment experience effectively without disconnecting campus teams from their standard processes.
PayPal and Venmo have been working to increase their foothold in higher education, especially over the past year. They have even offered student-athletes a way to receive a share of institutional revenue through their services. Additionally, Venmo has grown its presence on college campuses through partnerships related to Name, Image, and Likeness (NIL), as well as branded cards and event activations.
Frank Keller, president of Checkout Solutions and PayPal, stated that tuition is one of the largest expenditures families tackle, and it deserves the same flexibility and security that PayPal and Venmo already provide in everyday transactions. He mentioned that their systems are backed by security measures, including encryption and fraud monitoring. However, it’s worth considering that consumer regulators have raised concerns about funds in nonbank apps potentially lacking the same deposit insurance protections that federally insured banks and credit unions offer.
Certain balances in PayPal and Venmo could qualify for FDIC insurance if deposited with participating program banks, such as Goldman Sachs Bank USA and Wells Fargo Bank. But it’s crucial to understand that this insurance only protects against bank failures, not any issues with PayPal itself, which is not a bank and doesn’t accept deposits.
While the convenience of using familiar payment systems for tuition is appealing, families should stay informed about the associated risks and fees. After all, navigating college expenses can already be quite complex.
