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The devil’s in the details

BY JUSTIN SUGG | OCTOBER 05, 2009 7:20 AM

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I’m still waiting for my financial aid.

Card after card from the UI Office of Student Financial Aid has come in the mail, but I’ve yet to receive my refund check — the money left over after student loans pay tuition and anything else on the U-bill.

To receive the refund, I may have to take a cash advance on my credit card — an option I do not recommend in the least. Cash advances are extremely expensive and difficult to pay down. The UI is such a large institution, so it shouldn’t limit its credit-card payment options to just cash advances.

I didn’t notice the check’s absence at first, but after my roommate received his, I began to worry.

Could it have been lost in the mail? I recently moved, so that was a possibility. I checked my U-bill to see if the balance from summer had cleared — it was still there. The refund check, if the university dispersed it, should’ve cleared by now.

The worry increased. A month passed, and I still hadn’t received the check I needed. Savings were dwindling, and rent was due. The federal government notified me through the mail the money had been dispersed to the UI. The UI was withholding the necessary funds. But why? Could the university have kicked me out for not paying my U-bill this summer? As irrational as the thought sounded, it stayed in the back of my head.

The receptionist at Financial Aid told me the university received the loans and paid my fall semester tuition (thank God), but withheld the remainder because of my outstanding balance from this summer. It was federal government policy, she said.

This predicament left me in a Catch-22. I needed the loans to pay bills — including the U-bill — but couldn’t gain access because I had those bills. I didn’t have enough in the checking account to cover it. My only other option was to use my credit card, an option I didn’t relish using.

The person working at the counter told me I could pay my U-bill using a credit card at the UI Community Credit Union, but it could only accept cash-advances on the card. The teller working the counter at the IMU branch confirmed that, much to my chagrin.

Jim Kelly, senior vice president of marketing for the credit union, told me the it does not sell merchandise and therefore does not have a “merchandise number” with credit companies to allow such purchases.

For those unfamiliar with the credit world, a company or any other entity accepting credit cards must first make arrangements with such companies as Visa or American Express, which in turn assigns them numbers for various payment channels.

The credit union will accept debit payments, check payments, bank transfers and wires, but it will only accept cash advances on credit cards. I might as well take out a loan from Tony Soprano.

A cash advance on a credit card is a separate loan on the card. The most common way to take a cash advance on a credit card is through an ATM. They are for times when a person needs a cash loan but doesn’t want to take out a personal loan. Cash advances are rare — Kelly said approximately 5 percent of students pay their U-bill with one.

That’s probably because they are extremely expensive, both in the long and short term. The credit-card companies charge a percentage fee with any cash advance. My Wells Fargo Visa card charges 4 percent. Then it charges an interest rate separate from the rest of your balance — which can be as high as almost 23 percent. People unlucky or desperate enough to take out a cash advance must also pay their prior balance first. So while they pay off the debt made before the advance, that advance is building interest and growing.

Kelly said the credit union accepts cash advances as a convenience for students.

If the UI wants to truly make bill-paying convenient, it should accept other forms of credit-card payments.


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