Tuition Talk:
Second Semester Payment Blues
by Kevin Walker, Co-Founder & CEO of SimpleTuitionFebruary, 2008
Do you get them, too? I know I felt blue in graduate school when second semester tuition was due. You scrimp and plan with an eye toward front loading payments for the fall semester. But then January comes and that pesky term bill appears in the pile.
There are some ways to manage the shock of this reality better, if not the amount you ultimately have to pay. In fact, one of the best ways to manage this payment is the common, but often neglected “payment plan.”
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…
- $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
Read more from Tuition Talk
Mother of student
my first child went off to college this year and I certainly was not prepared for the financial burden. I guess I never realized that the student could not borrow the money alone to attend school. I always told my children I would provide the best private school education I could from K -12 and after that they would have to take loans to attend college. Hopefully, they would receive enought aid and/or scholarships. However, that did not happen we were short 4,000. Unfortunately, since I spent the last two years falling behind in all my bills and he was denied a parent plus loan & denied an alternative loan because I could not co-sign for him. I never realized that if I as a parent have bad credit my child could not attend college.
Posted By: Stephanie
2008-08-28 4:44 PM
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