Updated on July 14th, 2022
For many students, the biggest challenge they have to overcome is figuring out how to pay for college tuition. Luckily, there are a ton of options available, including college tuition payment plans.
College tuition payment plans give students a way to cover one of their biggest educational expenses without traditional student loans. Since it makes graduating debt-free easier, tuition installment plans are worth considering.
If your student is trying to figure out how to pay for college tuition and other educational expenses, scholarships can make it easier. If you and your student want to learn more about how scholarships can help them graduate debt-free and how to find amazing scholarship opportunities, sign up for our free college scholarship webinar! Take a trip over to http://thescholarshipsystem.com/freewebinar to reserve your spot today.
If you’d like to find out more about monthly tuition payment plan options, here’s what you need to know.
Contents
How Do Payment Plans for College Work?
College payment plans are a way to handle school-related expenses over time. Instead of paying for a full semester or quarter at the beginning of the period, students make monthly tuition payments to tackle the amount owed.
Usually, the first monthly payment is the largest. It serves as an incentive to keep the student attending classes and paying the remainder of their balance.
The last payment for the amount owed for the semester or quarter also has to be handled before the period ends. That way, the student has covered the total cost of the courses they took before they begin with new ones.
When it comes to interest, most college tuition monthly payment plans don’t have any if the student uses a direct debit or a similar approach. However, schools are allowed to charge interest if they choose. Typically, any associated interest rate is discussed in the tuition payment plan agreement, allowing students to see exactly what it is before they formally sign up for the program.
It’s also important to note that students may have to pay a setup fee. Usually, it’s pretty modest, coming in below $200 per semester or quarter.
Related Video: Tuition Payment Plans Explained: How to Save Money With Them
What Costs Can You Cover with College Payment Plans?
Generally speaking, a college tuition payment plan can only be used for direct costs associated with attending that school. For colleges that offer the program, tuition and fees are almost always eligible. In some cases, room and board can also be rolled into the plan.
When it comes to what isn’t covered, books, supplies, and equipment usually can’t be paid for with a college payment plan. The same goes for transportation-related expenses.
What Are the Benefits of Using a Tuition Payment Plan?
In most cases, the biggest benefit of using college tuition monthly payment plans is the ability to avoid student loans. While student loan interest is typically low, it can add up fast, particularly if your student relies on loans during their entire time in college. Since tuition payment plans are usually interest-free, that means your student will pay far less to attend college than if they had to use debt.
There are also other benefits to college tuition payment arrangements. The installments are a set amount, making the plan predictable. Additionally, most students can set up direct debits, ensuring they don’t have to remember to send a check to handle what they owe.
Finally, unlike the majority of private student loans, there is no credit check with most tuition payment plans. However, the school may need to see proof that the student has the ability to make the payments, such as pay stubs or bank account statements.
What Are the Drawbacks of Using a Tuition Payment Plan?
While tuition payment plans for college can be a great deal, there are drawbacks. Usually, the biggest one is that the full semester or quarter’s balance has to be paid in full by the end of the term. Students can’t defer until they graduate, something that they have the ability to do with most student loans.
Since students can’t defer, they will commonly need a source of income while they are attending classes. Many students find that having to work and study is challenging, and it may not be ideal for students who want to take larger course loads.
Next, while the setup fees are modest, they are an added expense. There can be other fees, too. For example, the college may charge extra to take payments by credit card, or there may be a late fee for a payment after the due date.
Finally, unlike student loan interest, any fees a student pays while using a tuition payment plan aren’t tax-deductible. In most cases, this is a small drawback, but it is one, nonetheless.
How to Pay for College with Tuition Payment Plans
1. Choose a Participating College
If your student wants to pay for college with a tuition payment plan, the first step is to find a participating school. Not all colleges offer tuition installment plans, so students who attend those schools don’t typically have this option available.
2. Review the Tuition Payment Program
More often than not, students will not have a multitude of options for tuition payment plan companies. Instead, colleges tend to partner with just one third-party provider, making it the only option available for students who want to go this route.
Once your student identifies a participating college, they should review the tuition payment plan program to see if it meets their needs. That way, they don’t assume that this approach to financing college will work only to discover later that an aspect of the program isn’t ideal for their situation.
If your student isn’t sure where to begin, here are some of the most widely used tuition payment plan companies around:
3. Review the Requirements
Each tuition installment plan can have unique requirements. Colleges may require participants to take a certain number of classes, meet specific income requirements, and have the right repayment option available, like direct debit. Before signing up, students need to review the information to make sure they are eligible.
4. Sign Up for a Tuition Payment Plan
In most cases, the signing up for monthly tuition payment plans is handled through the school’s financial aid office. A financial aid officer can provide your student with instructions to make sure they complete the process correctly.
Ideally, your student wants to sign up as soon as possible. That way, they can make sure the arrangement is in place well before classes begin or will have time to work through any obstacles that may arise.
5. Pay the Monthly Installments
After getting signed up, all your student will need to do is make sure that the monthly payments are sent on time. If they use direct debit, all that they’ll usually need to do is ensure that they have enough in their bank account to cover the payment. If they are using an alternative approach – like paying by check – they’ll need to send out the payment to ensure it arrives at the right place by the due date.
It’s important to note that the monthly installment is the minimum amount your student needs to pay by the due date. Usually, paying extra is allowed, and it could be a wise move for students that have the ability to tackle the balance early. Then, once the balance is paid off, they can use the money they would use for the monthly payment and set it aside for the next quarter or semester, allowing them to functionally get ahead.
If your student is trying to figure out how to pay for college tuition and other educational expenses, scholarships can make it easier. If you and your student want to learn more about how scholarships can help them graduate debt-free and how to find amazing scholarship opportunities, sign up for our free college scholarship webinar! Take a trip over to http://thescholarshipsystem.com/freewebinar to reserve your spot today.
Leave a Reply