University of Toronto made $1.8M in high interest on late fees
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Randall Hettinger is racing the clock, working 30 hours a week at two jobs – one retail, one construction — on top of a full slate of courses, so he’ll make the Nov. 15 deadline to pay the rest of his University of Toronto business administration tuition.
If he can’t make the final $5,000 by then — he paid the first $9,500 in August — the university will start charging him monthly interest, something he says he can’t stand to add to his student debt tab of $35,000.
At a rate of 1.5 per cent, compounded each month, it adds up to 19.56 per cent a year, on par with credit card interest.
“It’s strange they don’t let us pay semester by semester; it makes it so difficult for students who aren’t from upper-class families where money is no problem,” said Hettinger, 22, who said he lives with his parents to cut costs.
But so many U of T students are unable to make the November deadline for their final instalment that the school garnered nearly $1.8 million in interest on late payments in 2011-2012, new figures show.
A Freedom of Information request submitted by ecology student Ben Coleman showed that 8,040 full-time students on the downtown campus failed to meet the November deadline for tuition that year, the most recent one for which figures were available — and together they paid $1,756,292.42 in interest over that school year, for reasons Coleman said were not their fault.
“This is so punitive; full tuition is due in November, but students on OSAP (Ontario Student Assistance Program) don’t get their second instalment (until) January,” noted the third-year student.
Grad student Mattie Sedaghat had to pay that interest every year of her undergrad degree between November, when tuition was due, and January, when she got her second OSAP cheque.
“For students like me who support themselves, that’s a big deal. Every extra cost counts.”
But many U of T courses run all year, noted university spokesperson Dominic Ali, so “without some predictability about when fees will be received, it would become challenging for the university to operate and to plan for the future.”
In fact, Queen’s Park is poised to clamp down on institutions that penalize students for missing tuition payments for reasons that are not their fault.
“We think it’s unfair to expect students to pay late charges because they haven’t received their OSAP yet,” said MPP Brad Duguid, minister of training, colleges and universities. “We’re determined to introduce changes, and my goal is to have them ready by the end of December.”
Duguid would not comment on individual universities that charge interest or late fees, but said he is considering the idea of “per-semester billing” in which fees are due when each semester starts — not before.
“Charging interest is just another way institutions make money off students, and it’s egregious because it penalizes students for factors beyond their control,” said Alastair Woods, chair of the Ontario branch of the Canadian Federation of Students.
Ontario already has the highest tuition in the country, noted Amir Eftekarpour, chair of the Ontario Undergraduate Student Alliance, “so adding late fees is unfair; we’re happy to hear the ministry is moving forward to address this problem.”
Duguid also said he plans to limit so-called “flat fees,” in which universities charge full tuition even if a student takes as little as 60 per cent of a full course load, as at the U of T.
Eftekarpour slammed flat fees because they “make students pay for education they’re not getting.”
Some speculate the government will allow institutions to charge full tuition for no less than 80 per cent of a course load, and let students with disabilities and students with children pay strictly on a per-credit basis.
While Duguid said he does not want to “micro-manage” universities or take steps that would hurt the quality of higher learning, “I have to see post-secondary education through the eyes of students — they’re front and centre.”