According to the 2021 Sallie Mae survey “How America Pays for College,” nearly 80% of students and their families eliminated a college based on cost when determining which school to attend.
If the cost of college tuition is one of the determining factors in your decision process, it could be worth looking into tuition payment plans. College tuition payment plans are offered by colleges and allow tuition to be paid over an extended period of time. Typically, it is not difficult to qualify for a school’s tuition payment plan, but there may be a fee in order to enroll.
These plans are offered by some colleges and could help make tuition payments more manageable for students and parents.
What Is a College Tuition Payment Plan?
Instead of paying for college tuition at the beginning of each year, semester, or quarter, college tuition payment plans — also known as tuition installment plans or deferred payment plans — allow students and their families to spread out the cost of tuition over a period of time.
Depending on the school, the plan may allow payments to be made over the course of the semester or over the full year.
While you’ll generally have to start making payments right away, programs frequently offer the option to spread payments into monthly installments. Some schools also offer programs that break the payment into a few equal payments throughout the semester.
How Do Payment Plans Work?
Some colleges run their own tuition payment plans. Others use an outside service to administer the plan.
Typically these payment plans only cover the direct costs charged by and paid to the college, such as tuition and fees. Sometimes the cost of housing and meal plans will also be included under a tuition fee payment plan. The cost of things like textbooks and school supplies are not usually included in these payment plans.
Many tuition payment plans require an enrollment fee, which may fall around $50 or $100, although it may be lower. These plans don’t usually charge interest, which can potentially make them less expensive than taking out a student loan, as long as you are able to make the monthly payments.
What Types of Colleges Offer Payment Plans?
Many schools offer some sort of tuition payment plan. Qualifying for the plan isn’t generally very difficult. However, some schools do have specific enrollment periods. Check with the school you plan to attend to determine when you need to enroll and what is required to do so.
What if My School Doesn’t Offer a Payment Plan?
For many students and their parents, paying for school upfront isn’t possible. Sometimes even with a payment plan, the burden of tuition is still too high for students and their families.
Consider some of the following options when planning to pay for college tuition. While these ideas might not be enough to help you cover the full cost of tuition on their own, a combination of a few could do the trick.
Federal aid for college encompasses grants, scholarships, student loans, and work-study. To apply, students must fill out the Free Application for Federal Student Aid (FAFSA® ) each year.
The schools you apply to will use this information to determine how much aid you receive. You’ll typically receive an award letter detailing what types of federal aid you’ve qualified for and the amounts.
Federal Student Loans
Federal student loans can be either subsidized or unsubsidized. Subsidized loans are awarded based on need. The Department of Education covers the interest that accrues on these loans while you are in school at least part-time, during the grace period after leaving school, and during periods of deferment or forbearance.
Unsubsidized federal loans are awarded independent of need. Borrowers are responsible for paying the interest that accrues on these loans while they are in school and during periods of deferment, like the grace period.
Payments are not required on either unsubsidized or subsidized loans while you are actively enrolled more than part-time in school.
There are also PLUS loans available to parents who are interested in borrowing a loan to help their child pay for college.
The federal work-study program provides jobs for undergraduate and graduate students who demonstrate financial need. The amount of work-study you receive will depend on factors like when you applied, your level of determined financial need, and the amount of funding available at your school.
The money earned for work-study won’t count against you when you fill out the FAFSA, so it shouldn’t jeopardize future financial aid awards. Each time you fill out the FAFSA, it’s worth indicating that you’re still interested in receiving work-study as part of your financial aid award (that is, if you are still interested).
And it’s important to remember that your financial aid award may change from year to year, depending on you and your family’s circumstances.
Scholarships and Grants
Scholarships and grants don’t typically have to be repaid, which makes them one of the best options for students trying to pay for school. Some scholarships and grants are awarded by schools based on the information you provided in the FAFSA, but there are scholarships and grants available that aren’t based on financial need.
Taking some time to comb through online databases that catalog available scholarships, like FastWeb or Scholarships.com , could prove helpful. Each scholarship will have different application requirements.
Some might require an essay or additional supplementary materials, but the effort could be worth it if you’re able to fund a portion of your tuition costs.
Private Student Loans
Sometimes federal aid, scholarships, and your savings aren’t enough to cover the full cost of tuition. In those cases, private student loans could be an option. Unlike federal student loans, which are offered by the government, private student loans are offered by banks, credit unions, or other private lenders.
The private student loan application process will vary slightly based on lender policies, but will almost always require a credit check.
Lenders will review your credit score and financial history as they determine how much money they are willing to lend to you.
In some cases, students might need the help of a cosigner to take out a private student loan. This could be the case if they have little to no credit history.
Some parents may also be interested in taking out a loan to help their child pay for their education.
Tuition payment plans, which extend the payment for college tuition over a fixed period of time, can be helpful for parents and students as they navigate how they’ll pay for the cost of education. Spreading tuition payments over the semester or year can help make them more manageable.
Private student loans could be worth considering after you’ve exhausted your federal aid options, and if things like tuition payment plans aren’t financially feasible. If you decide a private student loan is a good option for you, consider SoFi as your lender.
SoFi offers student loans for undergraduate students and their parents. If you qualify to borrow a private student loan with SoFi, there are no fees. The application process can be completed entirely online. You can also choose one of four flexible repayment plans for undergraduate student loans.
Want to learn more about the private student loans offered by SoFi? See your rates and find out if you pre-qualify right now.
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SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs.
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