A new trend in higher education is emerging, as some universities have started accepting tuition payments via PayPal and Venmo, making the process potentially simpler for students and their families.
Bellarmine University, Butler University, Kansas State University, Michigan State University, and Texas Tech University are among the pioneering institutions to embrace these digital payment options. More universities are anticipated to adopt this practice as the year progresses.
While these payment methods offer convenience, they may also come with transaction or processing fees. The fees can vary depending on the university and the specific funding methods employed.
These digital payment options are being integrated through several campus payment systems, including Illumia, Nelnet Campus Commerce, and TouchNet. These platforms are responsible for handling tuition payments for universities nationwide.
“A modern tuition payment experience has to work for both sides of the transaction,” stated Don Smith, Illumia’s senior vice president and general manager of integrated payments, emphasizing the need for a seamless payment process.
“Students and families want the flexibility to use payment methods that fit how they manage their money, while institutions need those options to work within the systems and processes their teams already rely on. This integration helps schools expand choice in a practical way, improving the payer experience without creating a disconnected path for campus teams,” Smith added.
PayPal and its Venmo subsidiary have aimed to further expand their presence in higher education over the last year, offering student-athletes the opportunity to receive institutional revenue-share payments through their platforms. Venmo also expanded its presence on college campuses through NIL partnerships with student athletes, college-branded cards, student ambassadors and gameday activations.
The digital payment systems are already used by many students and families for daily money transfers, including purchasing groceries, splitting rent and sending money to friends and family.
“Tuition is one of the biggest payments a family will make, and it should come with the same flexibility and security that millions of people already count on PayPal and Venmo for every day,” Frank Keller, President of Checkout Solutions and PayPal, said in a statement.
“That’s why we’re proud to bring that same choice and protection into the reliable systems schools have already built.”
The companies said PayPal and Venmo use security measures including encryption and fraud monitoring. Consumer regulators, however, have cautioned that money stored in nonbank payment apps may not carry the same deposit-insurance protections as funds held directly in a federally insured bank or credit union.
Certain eligible PayPal and Venmo balances may qualify for pass-through FDIC insurance when funds are placed at PayPal’s program banks, which currently include Goldman Sachs Bank USA, Wells Fargo Bank and JPMorgan Chase Bank. Not all PayPal or Venmo balances qualify for the coverage.
But FDIC pass-through insurance “protects against the failure of a Program Bank, not the failure of PayPal. PayPal is not a bank, does not take deposits and is not FDIC insured,” PayPal said in a statement.