Advice on Paying for Tuition from One Semester to the Next
Ideally, paying for college begins long before you were even thinking about your higher education—in the form of smart financial planning and regular family savings. And it should continue throughout high school, when students are old enough to work. But even then, many students have a hard time paying tuition. Your best bet to successfully financing your higher education is to follow these checklist:
- Evaluate Your Financial Aid Award. As soon as you receive your financial aid award letter, review the terms and assessment of your financial situation. If you see any mistakes, call the financial aid office immediately to get them fixed.
- Exhaust Free Money First. Apply to as many scholarships and grants as you can. Every dollar you don’t borrow will save you significantly when it comes time to repay your loans.
- Determine if you need to borrow. Calculate your aid vs. your overall need to determine if borrowing is necessary
- Apply to Federal Student Loans First. Federal loans carry low, fixed interest rates, so if you need to borrow, always start with federal loans.
- Compare Private Student Loans – Comparing private loans is the best way to find the right loan for you, so do your homework and keep a cosigner handy.
And if you ultimately decide that a student loan is right for you…
- Choose a lender for your private student loan. While your school may have provided you with information about your federal student loan options, SimpleTuition can help you compare, select, and apply to the private loans that fit your needs. Just use our comparison tool.
- Get organized. Gather all of the information you will need for the loan applications. It’s generally straightforward, but there might be some things like the Department of Education code for your school, disbursement dates, and cosigner information that might not be readily available.
- For private loans, apply with a cosigner. You might not be able to get a private loan without one. And even if you could, your rates would be higher, so find a trustworthy cosigner ahead of time.
- Complete the applications early. Do it soon. Because of the lingering credit crunch, there could be complications in securing financing.
Preparing for Your Tuition Bill
Preparing for your tuition bill is all about knowing where your money is coming from before you need it. The first step toward doing that is understanding exactly how much you owe. After you’ve figure that out, the hard part arrives: actually paying for it. Then map it how that’s going to happen. Here’s where to start:
Know who is paying what: How much are you, the student, going to contribute? How much can your parents afford to pitch in? Do you have any savings? Can any other family members help with your cause of affording a higher education? It’s important to figure all this out early so you aren’t scrambling last-minute to come up with the cash.
Determine exactly how much you need to borrow, if any: If you and your family can’t come up with the difference between the cost of attendance and your financial aid award in cash, then you’ll probably have to borrow.
- Know exactly how much to borrow. Borrowing too much, or even too little, can be a costly mistake. Budget for extraneous things like food, living expenses, books, etc., but don’t use your loan disbursement for things like vacation.
- Use federal student loans first. They usually have lower rates and more favorable lending terms, so fill out a FAFSA if you haven’t already.
- If you still don’t have the money to go to school, consider a private student loan. But remember that comparing your options can save you thousands of dollars, so do that first.
Check if there are alternative methods of payments if that will help you avoid taking on new debt: If you can avoid taking out student loans, it pays to do so. Check with your school directly to see if they offer tuition payment plans, which can give you more time to come up with the cash you need to pay off your bill.
Obtain your money and pay your bill early: Last minute isn’t the best time to make financial decisions, so give yourself time to weigh all the options. This is especially true if you run the risk of not being able to pay your tuition bill on time. If you do, your school might drop you from your registered classes.
End of Semester Financial Tips
Time never stops and semesters keep coming. But so do the tuition bills, and they need paying. So there’s a mantra it pays to remember: there’s always another bill ahead. Even when you graduate, you probably have a pile of debt you need to work through. In light of all that, here’s a few ways to spend less, save more, and pay faster:
Remember to settle any outstanding balances on your student account: Particularly at the end of semesters, many students find that they still owe money to their school. Balances on student accounts accrue for various reasons—unpaid tuition, higher meal costs than budgeted, and other miscellaneous charges—but it’s important for students to pay those charges regardless of where they came from.
Before the academic year officially ends (and if you have a balance you can’t afford to pay any other way), consider using our loan comparison tool and find the money you need. There’s two virtues to paying your account balance. First, nothing is as liberating as being bill-free. But more importantly than that, if you don’t pay your account balance, most schools will take steps to force your payment, and those steps are rarely pleasant. So don’t wait too long to settle your account because those balances are impatient beasts.
- You got dropped from your classes.
- You’re not able to register for upcoming sessions.
- Many schools won’t issue official transcripts if you owe them money, so if you’re trying to win a scholarship, snag an internship, or get a job, you might be out of luck.
- You may be charged a monthly fee on your outstanding balance until it’s paid, meaning your debt is only getting bigger.
Start thinking about part-time jobs, especially if it’s summer: Whether on campus or off, get your name and resume in queue for the job you want before everyone else does.
Spend less during break: Another mantra: every dollar you don’t spend now is one you don’t have to borrow later. Save it.
Consider making a payment on a student loan, even if all your debt is deferred until you graduate or you’re currently in a grace period: Even if you make an interest-only payment (if it’s a private or unsubsidized loan), you’ll be saving yourself a chunk of money in the future. The quicker you pay off your debt, the less it costs you.
- Know exactly how much you owe. Gather all paperwork from your school, including your financial aid award letter, and figure out exactly how much you’ll be paying.
- Map out where each dollar will come from. How much will you pay out of pocket? How much will your parents pay? How much will come from savings, a job, scholarships, or your financial aid package? Get clever—check with family and friends and see if they can help you. If all else fails, consider a student loan.
- If you need to borrow money to continue your education, use all your federal aid eligibility first. Start with any subsidized federal loans first, since they’re cheapest, then move to unsubsidized federal loans, which are usually cheaper than private alternatives. If you’ve maxed out your federal aid eligibility, your best bet is a private student loan. But compare your options—since knowing how and what to borrow could save you thousands.
- Verify the deposit due date for your school. At the end of each semester, know when your next payment is due. Missing it could get you dropped from classes or you could see a late fee added to your bill.
- Contact your financial aid office if you have any questions about your financial aid package for the next semester or academic year. Also keep in touch with them for more financial aid opportunities, like scholarships. Keep a running dialogue with the financial aid office.