Picture this: you are a student at Illinois Tech. You come from a lower-class family out of state. You don’t benefit from in-state scholarships and your parents refuse to take out loans in their name or help with tuition. Luckily, you have figured that with the tuition that you do owe, you should be able to pay it off with part-time work on the side. Maybe that’s a job at the school, a nice paid internship, research, or working at some food service job nearby.
Every week, between classes and into the evenings, you clock in somewhere from 10-20 hours/week at your job, accumulating paycheck after paycheck, slowly earning the few thousand dollars you owe to the school. You spend frugally, saving as much money as you can, with the amount you owe etched into your mind’s eye. The day finally comes, the final paycheck that gives you just enough to pay off your tuition. It’s sometime around midterms or maybe even finals, but you’ve done it. You go to the portal, and press the “manage your account” button. And that’s when you see it.
“Late Payment Penalty Fee.” If you’re lucky, it’s less than a hundred dollars. Less than lucky, in the realm of a few hundred. A flat percentage fee, for failing to pay on time.
I’m not going to say it’s the end of the world, because it’s not. But seeing that fee can be greatly demoralizing. It can easily be the difference between paying 12 paychecks, or 13-14 paychecks. An additional day or week of work, all while you are still completing your classes. It’s humiliating. You know your peers who have parents or better scholarships don’t have to deal with this. It’s a poor tax. A tax on the working student. Perhaps you’ve even heard the term “pull yourself up by the bootstraps,” and, despite the literal impossibility of that statement, that is what you have seemingly done, only to be slapped in the face with a fine.
There’s a new saying in modern economics that fits this paradigm nicely. “It is expensive to be poor.” This saying refers to the fines, fees, and economic hardships that poor people face only for the fact that they are poor. More affluent citizens don’t have to worry about a late fee, or having to take out a predatory payday loan just to make ends meet. Low credit scores result in high interest rates. A negative bank account incurs a thirty dollar fine. A low paying job doesn’t offer health insurance. These truths aren’t a reflection of the work someone has put in. A poor person could be working two or three jobs, or taking care of children, or taking classes. The only reason these additional costs are accrued is because that person is poor.
This idea that late fees are evil isn’t a particularly new one. I’m not particularly religious, but there is plenty of religious text that suggests this fact has been known about for a long time. From both the Torah and the Bible, Deuteronomy 23:19 states “You shall not charge interest on loans to your brother, interest on money, interest on food, interest on anything that is lent for interest.” From the Quran, Al-Baqarah verse 275, “Those who consume interest will stand on Judgment Day like those driven to madness by Satan’s touch.” The Manu Smriti, 8.152, limits interest on loans no greater than “five in the hundred”, or five percent, and surrounding hymns place more restrictions of the disbursement, payment, and handling of loans.
I say this to share that my viewpoint isn’t particularly revolutionary. The late fee Illinois Tech administers seems to serve little purpose than to penalize the poor or otherwise those who are unable to pay at the beginning of a semester. It forces students and families to play catch up when they may be trying to earn the money to pay off the semester. It’s not a fee to keep up with lost money due to inflation, as evidenced by its administration mid-way through the semester. I should note that in the case of sudden job loss in the family, Illinois Tech may be willing to waive the late fee alongside other measures, but that seems like it should just be the default. So long as a student can pay within a reasonable time frame, something greater than just the first few weeks of the term, I can see little reason to administer a late fee other than to get a few extra bucks. In my opinion, late fees are just evil.