Breaking down college costs by semester
So where did June go? I couldn’t really tell you, although I think it has something to do with multiple graduation parties every weekend. And for another few weeks I was able to avoid dealing with tuition. But July brings both a deadline and an actual bill.
The odd part is that now that the tuition is broken down into two semesters, half of the Stafford Loan is applied ($2,737) and half of the tuition benefit from my husband’s employer is deducted ($2,500), the bottom line seems manageable. (The Stafford Loan increased from our original quote, but so did Penn State’s tuition.) We are looking at roughly $4,800 remaining for each semester, which can be paid in three installments of approximately $1,600. Going back to last year when the only numbers we were seeing were the “all-told” expenses, I realize why panic loomed. And now with the actual final figures, we have determined that without unforeseen circumstances, we can pay our portion in cash.
However, what also remains are the expenses my son will need to cover: books, school supplies, telephone, groceries, bus tickets, and general living. And even with working all summer, he doesn’t have the full cash for this. We think he’ll need about $2,500 per semester (mostly bookstore). So we’re looking at a $5,000 loan for him for the year.
We are in favor of cosigning a student loan rather than securing a parent loan. Since we have divided the costs roughly at us covering 2/3 and our son covering 1/3, we’d like to keep his portion as truly his. Also, since the student loan is deferred and the parent loans are not, it feels like it makes a lot more sense to not add more immediate monthly bills.
Our first research hit the school’s web page and related links. This approach led to some of the popular lenders: Sallie Mae, Citibank, Chase, etc. but my husband was hitting each site individually and then recording the details in a separate document.
We entered www.SimpleTuition.com in the student area rather than the parent link. It was a very quick process to reach lender information and we definitely liked the opportunity to chart four different options at once. Factors we had not considered were that some of the loans are directed right to the school while others are disbursed to the student. Also, some allow a cosigner to be removed after a certain number of payments. In addition to rates and origination fees, these are valid considerations for us. After the first web sessions, we are leaning toward SunTrust and Scholar Point and likely at least one of the regional banks. My husband plans to do follow-up this week so we can get the paperwork done before the car is packed in a few weeks!
- Verify the deposit due date for your school – usually May 1st (especially for new students), but it may vary by campus.
- Understand the costs and financial aid you will have for next semester. Other factors will effect your decision to enroll (or re-enroll), but costs – especially in the current economy – will be a major consideration.
- Contact your financial aid office if you have any questions about your financial aid package for the next semester or academic year.
- When you pay your deposit, make sure to get a receipt to your records…
…and always remember to use SimpleTuition to help you compare student loans!
Some End of the Semester Financial Tips
- Remember to settle up any outstanding balances on your student account. Some schools won’t let you re-enroll for next semester until you pay off any outstanding balances. For graduating students, you usually need to pay off all charges, or you won’t receive a degree and could possibly be denied access to transcripts. Your financial aid office or university business office can help you settle up.
- If you live off campus, remember to clean up the apartment before moving out. It would be nice to get your security deposit back, after all!
- Make sure any paper billing is re-directed to a permanent address, or is set-up for online payment.
- Now might be a good time to line up a part-time job for the summer and fall. Whether on campus or off, get your name and resume in queue for the job you want before the crush of returning students adds to the competition in the fall.
- Resolve to save as much money as you can this summer. Any extra money left over for next semester will take the pressure off the need to borrow.
Tuition Payment Plans
Payment plans are offered by almost all colleges and universities as a way to spread out cash payments for the year’s expenses over several monthly or quarterly payments. At least for me, they have the psychological effect of taking the sting out of the cost. For example, a $5,000 payment upfront at one time seems (and is) really steep. But paying $500 per month for 10 months, while just as costly, eases things a little bit. I find it also trains me to better manage my budgeting. In fact, the more you can squeeze into that monthly payment, the more you should. What if, for example, you could take that $500 per month to $550? Let’s see how that 50 bucks would add up (and save you money).
- Come up with an extra $50 each month. Yeah, it’s not insignificant, but you can do it.
- That adds up to $500 over a typical 10 month payment plan
- That might be $500 you don’t have to borrow…
- …and $500 borrowed in a typical private education loan might end up costing you $1,300 or more.
Each college usually has a designated payment plan provider or offers their own. So you usually don’t have a choice of plans. That’s generally okay because they work pretty much the same way:
- Pay a fee to sign-up (usually $100 or less)
- Decide how much you can manage through the plan
- That amount is then split into regular payments
- Plans generally work off of 10 months, but 12 month and quarterly options are common, too
- Plans usually start before the academic year begins, timing completion of payment with the end of the school year
- No interest is charged