Students will soon be able to Venmo their college tuition — but it may not always be the smartest choice

Venmo and PayPal are set to enable college students to pay tuition via their platforms at select universities like Bellarmine, Butler, Kansas State, Michigan State, and Texas Tech. However, this convenience comes with potential risks. Colleges may impose service fees, which can significantly increase the payment cost. Unlike traditional bank accounts, PayPal and Venmo balances are not FDIC-insured, so paying tuition through these platforms could put college savings at risk.

Additionally, relying on a third party for financial management raises concerns about security and record-keeping. Despite these risks, some users may benefit from FDIC insurance if they utilize specific PayPal or Venmo offerings like a Debit Card Mastercard or purchase cryptocurrency through these platforms.