One of the great things about the digital age is the ability to automate certain aspects of one’s life. For example, I recently began automating my United States Department of Education (USDOE) student loan payments. Beginning on March 28th and on the 28th of each month thereafter, an automatic debit will be taken from my bank account to make this payment. I’ve budget for it, I have it set to go, and it’ll all be done automatically. Perfect.
The USDOE has figured out how the system is supposed to work. There’s no hassle, no aggravation, no fees for the online payment service, and they even offer an incentive to use the automated system. This incentive comes in the form of a 0.25% interest rate reduction. That’s some pretty good customer service and the USDOE deserves credit for doing the right thing by its borrowers.
And then you have the New Jersey Higher Education Student Assistance Authority (NJHESAA). Ugh… These profit-focused folks just don’t get it.
The NJHESAA recently instituted an online payment portal, too. Sounds good, right? Well, not so fast! Not only is there no incentive for the borrowers to use the system (i.e. no interest rate reduction), but there is a fee for using the service! And not just a small fee, a 2.5% fee! How disgusting is that?!
Think about that fee in action. I just sent a $2,000 check to the NJHESAA. If I opted to make that payment online, that would have resulted in a total charge of $2,050. I’m sorry, but that’s just unacceptable. And I’m sure that the NJHESAA’ers that troll this blog are thinking to themselves, “Hey! We get charged to offer those online services. There is a cost to process payments online due to merchant fees and other fees charged by the credit card companies. This guy clearly doesn’t know what he’s talking about.”
Having dealt with the NJHESAA over the phone I know that they typically think their borrowers aren’t as intelligent as they are when it comes to, well, pretty much anything. So since I know that the NJHESAA folks are likely reading this and that they are likely thinking what I wrote above, let me remind them of a few business basics. First, there is a cost to doing business. The NJHESAA’s cost for offering the online payment system is being charged the various merchant fees associated with credit card and other payments. Since the NJHESAA isn’t in the business of selling retail products, it can’t raise the price of its goods to cover this fee. Instead, if the company wants to offer this feature, it has to absorb the cost.
Second, this company couldn’t try any harder to project a money-grubbing public image. Sure, they can get away with continuing to sell their services to unsuspecting new borrowers. However, with a growing chorus of voices like mine who aren’t necessarily focused on “exposing” anything, but instead are focused on educating younger generations on what getting a loan from the NJHESAA really means, I wonder how long they’ll be able to operate in their profit-first, borrower-second mindset.
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And to think, all the NJHESAA needed to do in order to avoid this particular entry of negative press was take their focus off of profits and put it on the needs of their borrowers. All they needed to do was absorb the cost of doing business instead of passing on that fee to their borrowers. But they just couldn’t do it. They just couldn’t focus on what was best for their borrowers because they were blinded by their bottom line.