Cut Off

At the University of Missouri at Columbia, students can whip out their college ID and use it exactly like a credit card, to charge food, clothes, toiletries, even an Xbox -- anything available for purchase on campus -- to pay off later.

Not so next month, when the university will limit what can be bought through this method to just textbooks and other academic materials in the university store, a move meant to stymie students' debt and preserve their academic standing.

Mizzou has encountered this problem: students sometimes don't pay their account balances, which eventually means they can't enroll in classes, said Jim Spain, vice provost for undergraduate studies.

Of the roughly 1,800 students who dropped out from the spring to the next fall semester, about 34 percent have a financial hold on their account, Spain said. A little less than half of those holds can be attributed to buying nonacademic items, he said -- and not paying.

The university store functions like any Target or Walmart -- students can buy food, Mizzou-branded clothes, makeup and electronics there, Spain said. While the university won’t re-evaluate stocking some of the most glamorous options, which he said would remain as part of the normal operations of the store, the institution is attempting to review students’ financial access to them. Students can still buy these items with typical credit cards or cash -- and students aren't always responsible with their credit cards.

The university card caps charges at about $1,200 per semester.

Students at Mizzou can still use their student IDs to pay for products elsewhere on campus, outside the store, like at the recreation center, or even for campus spa services -- massages, facials and waxes.

Many student expenses fall outside what Mizzou is now limiting, said David Helene, who founded a company called Edquity, which offers digital tools for college budget planning. Helene said the administration’s choice to change student spending is one of “good faith” but it’s unclear it will produce desired results, particularly for poorer families.

Though imprudent spending choices may lead to dropouts, experts say that more often low-income students, especially, struggle to pay for college at all, research indicates. A report from the Wisconsin HOPE Lab, part of the University of Wisconsin at Madison, shows that more than 70 percent of 19,000 undergraduate students interviewed in 2014 were at least sometimes worried they couldn’t afford college.

“For low- and moderate-income students in particular, it’s unclear students aren’t simply spending money on things like bills, health-care expenses and the like that are essential to either their own or their families' welfare,” Helene wrote in an email. “As it strikes me that this was a safe and reliable form of financing for students -- one that also helped with cash flow, which for students can be extremely irregular and difficult to manage -- it’s possible students may subsequently resort to student loans or other credit products to try to fill this void.”

Spain acknowledged that students can pay in other ways but said that those options wouldn’t jeopardize a student’s standing at the university. He said in the worst-case scenario, the university would have to pursue the outstanding charges through a collection agency, which would also affect a student’s credit rating. The university would also withhold students’ transcripts, which would prevent them from transferring, Spain said.

“We’re going to be looking deeper at our processes and policies and trying to further advance student success by improving their financial relationship with the institution,” he said.

In his experience, Helene said, most students prefer a debit or preloaded credit card, especially after the federal Credit Card Accountability Responsibility and Disclosure -- or CARD -- Act of 2009, which offered new protections against credit card fraud and unfair fees and payment structures.

Paul Golden, a spokesman with the nonprofit National Endowment for Financial Education, said that many felt the CARD legislation solved all the issues -- but it’s still up to the consumer to take ownership and read the fine print of credit card agreements.

Students are still adjusting to this, Golden said. They are particularly vulnerable because often they have a new degree of financial freedom, he said. His organization has been following 2,000 college students in a decade-long longitudinal study and found that often they formed poor spending habits early on in college.

“It seems to be a good idea … it gets people mindful and thoughtful about their spending decisions and what’s going on,” Golden said of the Mizzou changes.

Some students, however, have criticized the shift, claiming the administration didn’t consult them.

One member of the university’s student senate, Jacob Addington, posted to Twitter, saying that students deserved “to have a voice” because it’s a massive change to the way they purchase items.

This set off a digital debate, with another person replying that while some policies deserve student input, this was not one of them.

Spain said that in the past 18 months the university has conducted focus groups with students about wider financial issues than just the charge card. He said he could not identify how many sessions the university has held, because the employee running them left Mizzou.

Another student, Tim Davis, wrote on Twitter that some students couldn’t afford food without the charge option.

“Not all parents pay for their child's education, and when I have no money at the moment to buy food, I am glad that student charge exists,” his tweet reads.

Spain said that much of the student criticism stemmed from them feeling that charging purchases to their ID was most convenient.

In a poll that the student senate conducted on Twitter, 80 percent of the nearly 500 who responded said they disagreed with the decision.