The Coming College Credit Crunch
There’s been surprisingly little discussion of the last-minute addition to the health care reform law that dramatically recast the federal role in student loans. As such, it’s no surprise that some provisions of that part of the bill that would have caused considerable controversy had the bill been brought to the floor in a more traditional manner. A sure candidate for chief among those must be the little noticed provision outlawing paying tuition with credit cards.
Presumably intended to “protect” students from incurring massive amounts of high interest debt early in life (the conspiratorially-minded will say to prevent competition), the real result (as is so often the case) will actually be to put a major hurdle in the way of some such students getting their tuition paid on time – or at all.
Lots of students and their families use credit cards to bridge the gap between the tuition bill being due and loans or grants arriving. With the feds more or less taking over the sector, that problem is likely to become worse. So now students whose checks are delayed are deprived of the quick and easy — and almost always painless — fix of being able to put it on their plastic and simply pay it off when the tardy check arrives.
To make matters worse, another provision seems extend last year’s Credit Cardholder’s Bill of Rights Act to cap limits on those omnipresent student credit card offers. So those same students whose checks are late and who need to buy expensive books and/or supplies may also find themselves in another kind of bind.
Nothing about the add-on does anything to address the real problems with student debt. And even giving them the benefit of the doubt that these provisions were well-meaning, these are just the sort of ill-considered, paternalistic interference with decisions that college-age adults ought to be free to weigh and make for themselves, even in today’s day and age.