Merchant Category Code 8220 applies to colleges, universities, and higher education institutions collecting tuition, fees, and auxiliary service payments. This category involves large transaction values, financial aid complexity, and multi-semester payment plans.
Key Information
This guide addresses higher education payment operations where tuition billing, refund policies, and student account management create unique merchant challenges.
Typical Business Types
Public Universities
#1
State-funded four-year institutions offering undergraduate and graduate degree programs.
Private Colleges
#2
Independent higher education institutions with private funding and selective admissions.
Community Colleges
#3
Two-year public institutions offering associate degrees and certificate programs.
Payment Processing Information
Transaction Types
1
Tuition Payments
Semester or quarterly charges for academic credit hours and program enrollment.
2
Housing and Meal Plans
Fees for on-campus residential housing and dining services.
3
Course Fees and Lab Charges
Additional charges for specific courses, materials, or laboratory access.
4
Payment Plan Installments
Monthly payments spreading tuition costs across academic terms.
5
Application and Enrollment Deposits
Fees for application processing and securing enrollment in upcoming terms.
Common Payment Methods
Credit and Debit Cards - Common method for tuition and fee payments
ACH Bank Transfers - Direct payments for tuition bills and payment plans
Student Loan Disbursements - Federal and private loan program payments
529 Plan Payments - Education savings account withdrawals for qualified expenses
Third-Party Billing - Employer tuition assistance and veteran benefits
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Refund Policy Disputes - Students seeking refunds outside add/drop windows
Enrollment Deposit Disputes - Claims deposits should be refunded despite no-show status
Financial Aid Confusion - Disputes over expected aid amounts versus actual charges
Service Quality Claims - Chargebacks alleging inadequate instruction during remote learning
Withdrawal Date Disputes - Disagreements over official withdrawal timing affecting refund calculations
Regulatory Challenges
Title IV Compliance - Federal financial aid program requirements
State Authorization - Operating authority in states where students are located
FERPA Compliance - Student record privacy protections
Refund Policy Requirements - Return of Title IV funds and institutional refund calculations
Consumer Protection Laws - Truth in advertising and outcome reporting requirements
Common Fraud Signals
Enrollment Without Attendance
Students enrolling solely to receive financial aid refunds without attending classes.
Rapid Enrollment and Withdrawal
Pattern of students enrolling then quickly withdrawing to test refund policies.
Multiple Failed Payment Attempts
Numerous declined transactions before successful enrollment payment suggesting fraud.
Example Scenarios and Red Flags
Add/Drop Refund Disputes
A university experiences chargebacks from students who missed drop deadlines claiming they weren't clearly informed of refund schedule cutoffs.
Remote Learning Quality Claims
Students dispute charges claiming online instruction quality didn't justify full tuition during pandemic transitions.
Housing Contract Disputes
Students leaving campus mid-year dispute remaining housing charges claiming exceptional circumstances warranted full refunds.
Financial Aid Expectation Gaps
Students chargeback balances claiming verbal promises of additional aid that weren't formally awarded.
Program Completion Disputes
Students claim degree or certification programs didn't deliver promised outcomes or employment prospects.
Common Underwriting Questions
UW Tips Business
Verify accreditation status and Title IV program eligibility
Confirm state authorization in jurisdictions where students are enrolled
Review student outcome reporting and placement rate accuracy
UW Tips Financial
Analyze tuition dependency versus auxiliary revenue streams
Review refund rates and reasons across different withdrawal scenarios
Assess accounts receivable aging and student debt collection processes
UW Tips Risk
Examine chargeback ratios focusing on refund policy and service quality disputes
Evaluate enrollment verification and attendance monitoring systems
Review clarity of refund policies in enrollment agreements
UW Questions Business
What degree programs do you offer and what is your enrollment size?
What percentage of students receive Title IV financial aid?
How do you verify student attendance and academic engagement?
UW Questions Payments
How do you structure tuition billing and what percentage use payment plans?
What is your refund schedule for students who withdraw during terms?
How do you coordinate billing with financial aid disbursements?
UW Questions Fraud
What systems prevent enrollment fraud including attendance verification?
How do you detect students enrolling solely for financial aid refunds?
What procedures verify payment authorization for enrollment?
UW Questions Compliance
Are you compliant with Title IV financial aid program requirements?
How do you protect student records and ensure FERPA compliance?
Do you have clear refund policies meeting regulatory requirements?
UW Questions Chargebacks
What is your chargeback ratio and what are primary dispute reasons?
How do you document enrollment agreements and refund policy acknowledgment?
What procedures handle student complaints before disputes escalate?
UW Questions Infrastructure
What student information system manages enrollment and billing?
How do you process payment plans and coordinate with financial aid?
Are your payment systems integrated with academic records?
Ongoing Monitoring
Transaction Monitoring
Monitor enrollment patterns for students withdrawing at refund cutoff dates
Track dispute rates by program and academic term
Review refund processing timeliness and accuracy
Compliance Checks
Maintain Title IV program participation and accreditation
Ensure FERPA compliance for student financial records
Keep refund policies updated and clearly communicated
Security Updates
Use secure payment processing with PCI compliance
Implement strong authentication for student account access
Deploy systems protecting student financial information
Risk Assessment
Review refund policy communication to reduce dispute rates
Assess instructional quality metrics against service complaints
Monitor seasonal enrollment and withdrawal patterns
Merchant Communication
Emphasize importance of clear refund policy communication at enrollment. Provide guidance on documenting attendance and academic engagement. Support institutions in navigating Title IV compliance requirements.
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