Tuition Payment Plans May Help Pay for College and Make Student Loans Unnecessary
Installment plans allow payments to be stretched out instead of paid in one lump sum
Students heading back to college—or going for the first time—have a lot on their minds: finding their classes; decorating their dorm rooms, apartments, or houses; catching up with friends; figuring out the best way to balance a job with their studies while also trying to have a social life. With all of these concerns weighing on them, the thought of how to pay tuition is one stressor that many students (and their parents) would rather not have to worry about.
Fortunately, there are many options available for those looking for a way to pay for their education, and one of the least-known is the tuition payment plan offered by many, though not all, colleges. These plans enable students to stretch out their payments across a period of time, such as a semester or a calendar year, instead of making one large lump sum payment.
Being able to make payments in installments over the course of time makes things more manageable, according to Shannon Vasconcelos, director of college finance for College Coach and former financial aid officer at Boston University and Tufts University. Some families may be able to make payments out of their monthly income, making it unnecessary to take out loans. Making such payments may be easier than parents might expect since they will not need to pay for other expenses for their child on a daily basis.
"Most plans are interest free but charge an enrollment fee that is typically about $50," says Consumer Reports. "The most common payment plan program spreads payments in monthly installments. Other colleges have deferred payment plans in which you make three or four equal payments during the semester."
If the parents or student wishes to enroll in such a plan, it is best to do so a few months prior to the beginning of the semester, though the exact timing will depend on the requirements of the school. Some schools allow credit card payments but will charge a higher fee for them. Payments can also be automatically drafted from a bank account.
There are some schools that do not offer direct payment plans but that will accept one set up through a third party. Some of the larger companies offering this service include Tuition Pay, Higher One, and Tuition Management Services.