In an effort to curb student debt, the University of Missouri (Mizzou) has taken a controversial step: placing limits on what students can charge on their university accounts.
Earlier this month, the university announced a new policy that will bar students from using a financing option known as “student charge” to make non-academic purchases. The restrictions, which are set to begin in August, are supposed to promote better spending habits, increase retention, and support students in making progress towards their degrees, according to a statement from Jim Spain, vice provost for undergraduate studies at Mizzou, in the Kansas City Star.
While well intentioned, Mizzou’s new policy may actually have the reverse effect for the most vulnerable student populations.
Student charge works like a credit card that has a $1,250 limit and doesn’t charge interest. Using their university ID, students can pay for purchases at on-campus stores and restaurants. Those charges are added to a student’s institutional account at the end of the semester.
Banned “non-academic” purchases include services at Mizzou’s recreation center, food at campus restaurants, and some items from the Mizzou general store such as clothing and cosmetics.
For students from wealthier backgrounds, Mizzou’s decision will be, at worst, inconvenient. But for students from low-income backgrounds, the ability to use student charge to buy a meal between classes or toiletries in an emergency when funds are low can create stability and reduce stress, which research shows can be critical to retention. Even the ability to buy university branded clothing can mean the difference between fitting in and feeling out of place, which also plays a role in student success.
To be sure, payment options that open a line-of-credit like student charge are not ideal for students who may not have good spending habits, especially not when outstanding balances are tied to enrollment eligibility and can even be sent to collection agencies. And there is something to be said for teaching students how to manage their finances in college, or protecting students from incurring too much debt.
But policies like Mizzou’s are put in place by colleges’ [administrators] who think—or would have us believe—that they have less influence over financial circumstances of their students than they actually do.
