Universities are now letting PayPal and Venmo process tuition payments, handing Big Tech direct pipelines to the financial data of millions of students already crushed by loan debt. Bellarmine University, Butler University, Kansas State University, Michigan State University, and Texas Tech University are among the first to adopt the integration, with more expected this year, according to the New York Post.
The stake is straightforward: who owns the transaction history of America's next generation, and what are they doing with it? PayPal and its Venmo subsidiary have spent the last year aggressively expanding their footprint on campus — NIL deals with student-athletes, college-branded cards, student ambassador programs, and gameday activations. Now they're positioned at the top of the payment chain, processing the single largest expense most families will make outside of a mortgage. That is a data trove worth billions.
The payment options are being integrated through campus payment platforms Illumia, Nelnet Campus Commerce, and TouchNet. Don Smith, Illumia's senior vice president and general manager of integrated payments, framed it as a win for convenience: "A modern tuition payment experience has to work for both sides of the transaction." Frank Keller, president of Checkout Solutions at PayPal, called tuition "one of the biggest payments a family will make" and said it "should come with the same flexibility and security that millions of people already count on PayPal and Venmo for every day."
What neither executive mentioned: students and families may face transaction or processing fees on top of tuition, depending on the university and the funding method. The Post noted the fees but did not specify amounts. Convenient omissions from companies selling convenience.
Then there is the insurance gap. Consumer regulators have cautioned that money stored in nonbank payment apps may not carry the same deposit-insurance protections as funds held in a federally insured bank or credit union. Certain eligible PayPal and Venmo balances may qualify for pass-through FDIC insurance when funds are placed at PayPal's program banks — Goldman Sachs Bank USA, Wells Fargo Bank, and JPMorgan Chase Bank. But not all balances qualify, and PayPal itself admits: "PayPal is not a bank, does not take deposits and is not FDIC insured." The protection covers the failure of the program bank, not the failure of PayPal. If PayPal goes down, your tuition money could go with it.
The timing is rich. While Big Tech tightens its grip on how families pay for college, the universities themselves are presiding over an academic collapse. More than 1,200 University of California professors, including Nobel laureates, signed an open letter warning of a "severe" crisis: incoming freshmen who cannot do fractions, forcing educators to dumb down calculus courses. UC San Diego reported a 30-fold increase in students lacking basic math skills — from 30 students in 2020 to 900 in 2025, according to a university working group. Professors blame the elimination of SAT and ACT testing requirements, which they say has rewarded rampant grade inflation. California Governor Gavin Newsom dismissed the warnings as "anecdotes" and demanded to "see the data" — this while the state spends over $28,000 per pupil annually and barely 37% of students test proficient in math.
The universities can't teach fractions, but they can sure process your payment. And PayPal is happy to collect the fee and the data.
The open question: who audits what PayPal and Venmo do with the financial profiles they are now building on every student who pays tuition through their platforms — and whether anyone in Washington will ask before the next generation's financial history becomes Big Tech's proprietary asset.
