By Kim Rahn
Cho In-young, entering her sophomore year at Seoul Women’s University, has to pay close to 3.4 million won in tuition fees for the upcoming semester.
As her school doesn’t accept credit card payments, she and her parents are preparing to hand over the lump-sum in cash.
“My elder sister becomes a senior this year. It is a huge burden on my family to pay such huge sums of money all at once. It would be better if schools accepted credit cards and allowed payments to be made in installments,” she said.
Like Cho, many students and their parents are struggling to arrange such large amounts of cash to pay for tuition at a time, with many schools refusing to accept payments by credit card.
Only 22.4 percent, or 101 out of 450 colleges across the nation, allow credit card payments for the new semester, according to credit card companies, Wednesday.
This number is down from last year’s 108, despite continuous attempts by the government to persuade school administrations to accept credit card payments for tuition.
The decrease in the number resulted from the revised Credit Finance Law, which became effective in December. This law is aimed at raising the commission rates of credit card companies for large businesses such as discount chains and instead lowering those for small-sized mom-and-pop stores to relieve the latter’s financial burden.
“When the law was revised, colleges were included in the category of large-sized businesses and not recognized as businesses exempt (from the commission rates),” said a staffer at Shinhan Card.
The staffer refused to detail precisely by how much the rates had increased for schools, stating that such information is confidential. But sources said the rates rose to 1.5 percent or higher, while they used to be less than this figure. The rates applied differ from school to school and company to company.
As the rates increased, colleges complained that now they have to pay higher commission fees to the credit card firms, presumably hundreds of millions of won more than last year. Seven schools, which accepted credit card payments last semester, decided not to do so this year.
Even before the law was revised, many colleges were reluctant to allow credit card payments due to the commission fees.
The attitude of the colleges is aggravating the financial burden on students, especially during the current economic slump. If they are allowed to pay by credit card, they can pay in installments over three to 12 months.
“It doesn’t matter for schools whether students pay tuition in cash or by credit card, and it is better for them to accept cash because they don’t have to pay the commission. The inconvenience and financial burden ultimately falls upon the students,” Cho said.
Last year, politicians attempted to revise the Higher Education Law, which included a proposed revision regarding the use of credit cards to pay for tuition in installments of up to 12 months, but this was rejected by the National Assembly.