Tuition Payment Plans

If you need more time to make tuition payments, colleges with payment plans allow you to spread tuition payments into equal monthly amounts. Tuition payment plans are an alternative financing solution that students can use in addition to scholarships, grants, loans, and work-study to cover college costs over time.

Consider a tuition payment plan if you can't afford the full tuition bill at once.

Getting Started with Tuition Payment Plans

Many prospective students know to look into financial aid to help pay for college, but not as many are aware of tuition payment plans, let alone how they work. The steps below will guide you through deciding if a tuition payment plan is right for you.

Determine if You Need a Payment Plan

A tuition payment plan can make sense if you're paying for all or part of your college from savings or other funds. Likewise, if you plan to work to earn part of your tuition, paying over time can make it easier to earn funds before they're needed.

When to Start Looking

Prospective students and families interested in enrolling in a tuition payment plan should explore that option at the same time as they're looking at financial aid. However, tuition payment plans should be a lower priority than securing financial aid, whether in the form of scholarships, grants, work-study, or loans. It's not often that a tuition payment plan will turn a completely unaffordable school into an affordable one, but at the very least, it can make paying tuition costs more manageable.

Speak With Your School

Some tuition payment plans are offered through the school, although many of these schools use a third-party company to administer the process. Either way, you normally need to speak first with your school's bursar or financial aid office to sign up for a payment plan. Once your plan is set up, requests for assistance should be directed to the school itself or by contacting the company directly, depending on what your school prefers.

Choosing the Right Payment Plan

Tuition payment plans are rarely free. When you choose a payment plan, you'll normally pay for that convenience with an enrollment or monthly fee. You'll also need to consider the cash flow implications of making the monthly payments and whether you can keep up with the costs.

Fortunately, options beyond standard payment plans, like deferred or direct bill plans, can make it easier to meet monthly payments. Below is an overview of your options.

Standard Plans

As the name implies, standard plans divide tuition into regular monthly payments. For example, if your tuition is $10,000 for the year, instead of paying upfront each semester, a standard plan may allow you to pay $1,000 per month for 10 months.

Deferred Plans

With deferred plans, some colleges allow you to make tuition payments later rather than withdrawing. For example, you might pay 50% during the semester and the remaining 50% over time. If tuition is $10,000, you might pay $500 monthly for 10 months, and the remainder in further installments.

Tuition Stabilization Plans

Tuition stabilization, also known as prepayment or tuition locks, allows you to pay the same tuition as your first semester through graduation, avoiding rising tuition costs. For a tuition lock, some schools require the total amount in advance, while others require payment at the beginning of each semester.

Direct Bill Plans

You can use a direct bill plan when any third party, such as your employer or your parent or guardian's employer, will pay for tuition. In this case, the school directly bills the third party. Direct bill plans allow the third party several weeks into the term before the full tuition payment is due.

Service Companies Offering Tuition Payment Plans

Many schools offer tuition payment plans but don't administer them themselves. Instead, they outsource the processing to a tuition payment plan company. Below, we list a few service companies that your school may work with. Be sure to check with your school to confirm the provider they use and find the best options for your needs. Please note: This list is for informational purposes only.

Financial Considerations

When people think about college costs, the first thing that comes to mind is tuition. But in many cases, other significant costs can rival tuition in terms of financial burden on the student. And often, financial aid or scholarships will not be enough to cover these costs. This includes housing, other cost of living expenses, school fees, transportation, and supplies.

Enrollment Fees and Interest

As for the extra costs associated with tuition payment plans, it's essential to check for interest and fees. Most colleges with payment plans do not charge interest, but there is typically an enrollment fee of around $20-$100. However, you could face steep fees or penalties if you make a late payment.

Resources for Navigating College Costs

The U.S. Department of Education's College Affordability and Transparency Center is an excellent online resource that allows prospective students to more effectively compare schools based on their costs of attendance. The following is a list of available tools:

Frequently Asked Questions About Tuition Payment Plans

How do tuition payment plans work?

Tuition payment plans spread tuition costs over time. Standard plans divide the tuition payments over the semester or school year. Deferred tuition payment plans allow you to pay over a longer time. Tuition-stabilized or direct bill plans also give you more options to pay for college or save on total costs.

What is a late fee for a tuition payment plan?

The late fee for a tuition payment plan varies by loan servicer. Some charge a late payment fee, while others charge a fee for credit card payments.

If your college is the loan servicer, late payments could jeopardize registration for new classes or graduation. Some colleges charge interest after a late payment or require a full immediate repayment.

What happens if you don't make your payments?

Potential penalties for missed payments or insufficient funds can have serious consequences.

For example, you might be blocked from graduation or registering for new classes, or you might face late fees or interest on the amount due.

At some colleges, your payment plan will be canceled immediately if you miss an installment deadline, and you'll be charged interest on the outstanding balance until it's paid in full.