Alternative College Payment Options
Monthly payment plans are an excellent alternative financing mechanism for those students and parents who do not want to generate a significant amount of educational debt, but yet cannot easily afford to pay for an entire semester of college in a sump sum.
Most colleges and universities no longer allow students to make installment payments for their tuition and associated fees. Instead, payment is generally required before enrollment is considered complete. With a monthly payment plan, the financing company will generally either pay the financed amount, or they will have an arrangement with your school.
How a monthly payment plan works depends on the particular plan provider, but generally there is a low enrollment fee and no interest over the course of the academic year. Your financed amount is broken up into a specific number of payments (6, 9 or 12 in most cases) that will be made each month to the plan provider. Since this type of financing is not a loan, at the end of the year there is no resulting debt for the student or their parent(s).
As more colleges and universities become aware of the difficulty of meeting rising educational costs, payment plans are emerging as a common recommendation for alternative education financing. If you are considering a monthly payment plan, it is best to check with your specific school to see if they have a recommended plan. If not, you may need to investigate the options on your own.
The benefits offered with the monthly payment plan selected are important, and should include life insurance for the responsible payer as well as a cancellation option should the plan be paid in full early or the student decides to stop attending and the student account is adjusted. There should not be any extra fees above and beyond the enrollment fee.
Before considering a monthly payment plan, you should contact your specific financial aid office to find out if there are other need-based aid programs which may be available to you. Generally, these programs are administered based upon your responses on the FAFSA and your school’s financial aid application – however there is always room for adjustment within the programs available. Contact the office early for the best possible result to this inquiry.
If you have decided that a monthly payment plan might be a good option for you, review all of your options carefully. Remember that if you are unable to satisfy the conditions of the plan, you may be unable to continue attending school.
Using a monthly payment option with your college will normally only cover the costs of tuition and books. Money needed for living expenses such as utilities, food and rent can still be obtained through a private student loan available through Student Loan Advisors.