Some Tuition Payments Now Payable by PayPal and Venmo

Students at some U.S. universities are now able to pay their tuition through Venmo or its parent company, PayPal, the financial technology giant announced Wednesday.  

PayPal has partnered with three top tuition-payment companies, which collectively service over a thousand universities, to allow students to pay tuition and fees through PayPal and Venmo, according to the announcement. Students at a handful of institutions, like Michigan State University and Texas Tech University, can already use those platforms to pay their institutions, and PayPal said it expects more to join in the coming year.

The goal of these partnerships, the company stated, is to make paying tuition more convenient for students, many of whom already use money-transfer apps like PayPal and Venmo in their daily lives. 

“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,” Don Smith, senior vice president and general manager of integrated payments at Illumia, one of the education-payment platforms PayPal is working with, said in the announcement. “This integration helps schools expand choice in a practical way, improving the payer experience without creating a disconnected path for campus teams.”

To pay this way, students will go to their institutions’ regular payment portals, where they will be given the option to pay via PayPal or Venmo, among regular card options.

This isn’t the company’s first foray into higher education. PayPal already has agreements with the Big Ten and Big 12 athletic conferences to allow institutions to make revenue-sharing payments to athletes via Venmo.

Bryan Dickson, director of education policy at the National Association of College and University Business Officers, said this feels like a natural progression for how colleges handle tuition payments, following the transition from paper checks to electronic payments. 

“Institutions want to meet the demand of the market. Just as we’ve seen institutions adjust to the needs of the students when it comes to housing, dining, activities and campus services—PayPal, Venmo and other tools are fairly ubiquitous these days,” he said. 

But Mike Pierce, executive director and co-founder of Protect Borrowers, a nonprofit dedicated to fighting predatory lending, said he was concerned about the offering in light of evidence from a 2020 report that some unaccredited, for-profit workforce-training programs advertised PayPal Credit as a way for their students to pay tuition.  

At the time, PayPal said it had no formal relationship with those for-profit schools and did not advertise to that sector. Following the report, the company disallowed programs that were using misleading language to use PayPal Credit.

“I think that advocates for students should be skeptical of these kinds of deals, because faster and simpler payment processing isn’t really the thing holding people back from going to college; it’s not having enough money,” Pierce said. “When you have massive companies getting into the student payment scheme … we should be skeptical.”

In an email to Inside Higher Ed, PayPal said students will not be able to apply for PayPal Credit or Buy Now, Pay Later loans when paying their tuition; instead, they can use their balances on those apps, or cards or bank accounts connected to their accounts. The universities will pay transaction fees to PayPal.

“For Gen Z, digital-first payment behavior is the norm. Students already use PayPal and Venmo for rent, for splitting a bill and for paying friends and family back. Now that same experience shows up as a payment option for tuition too, right at checkout,” the company wrote, citing a forthcoming report in which 94 percent of Gen Z survey respondents said they use a payment app weekly. “Parents value that same security. Many have used PayPal for decades, and tuition is one of the largest payments a family makes. Being able to pay it through a network they already trust, with the ease and flexibility they expect, makes a payment of this size feel less daunting.”