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

More about Payment Plans
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

2008 is going to be the year of saving, folks. Whether you save it in your bank account, save it by getting a roommate, or save it by not borrowing – this is the time to get creative. Payment plans can be a great tool to manage your tuition payments – and they might even help lessen the second semester payment blues.