When it comes to choosing a school, cost is top of mind for many students. In fact, nearly 81% of students and their families eliminated a prospective college based on its price tag, according to a 2022 Sallie Mae survey.
If the cost is a factor you’re considering, it could be worth looking into a college tuition payment plan. These plans allow students and their families to pay tuition and fees over an extended period of time. Qualifying for a plan is usually not difficult, though you may be required to pay an enrollment fee.
Here’s a look at how college tuition payment plans work.
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, schools frequently offer the option to spread payments into monthly installments. Some also offer plans that break the payment into a few equal payments throughout the semester.
How Do Payment Plans Work?
Some colleges and schools 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. The cost of things like textbooks and school supplies are not usually included in these plans.
Many tuition payment plans require an enrollment fee, which may run around $50 to $100, although it could be lower. These plans don’t usually charge interest, which can make them less expensive than taking out a student loan, as long as you are able to make the monthly payments. There generally isn’t a credit check.
What Types of Schools Offer Payment Plans?
Many schools offer some sort of tuition payment plan. Generally, qualifying for the plan isn’t very difficult. However, some schools do have specific enrollment periods. Check with your preferred school to determine when you need to enroll in a payment plan and what is required to do so.
Colleges and Universities
Tuition payment plans are offered at most, though not all, colleges and universities. Check your school’s website for details on available installment plans and see if there’s one that fits your needs and budget.
Graduate Schools
Many graduate programs offer payment plans. Enrollment dates can vary, so contact your program to find you when you’ll need to sign up.
Community Colleges
Community colleges typically offer payment plans for students and their families who are unable to pay costs upfront. Similar to plans at other types of schools, installment plans at community colleges may only cover certain costs, such as tuition and fees.
Trade Schools
On average, trade school tuition can range from $3,674 to nearly $16,000, according to data from the Department of Education. Some schools may offer a payment plan so students can pay the tuition and fees in installments.
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What if My School Doesn’t Offer a Payment Plan?
If your preferred school doesn’t offer a payment plan, you can explore independent plans offered through private organizations. Your school’s financial aid office may be able to provide referrals.
Of course, even with a payment plan, the burden of tuition can still be too high for some students and their parents. Consider some of the following options when planning to pay for college tuition. While these ideas alone might not be enough to help you cover the full cost of tuition, a combination of a few could do the trick.
Federal Aid
Federal aid for college encompasses grants, scholarships, student loans, and work-study. To apply, students must complete 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.
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.
Work-Study
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 your 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 scholarship search tools 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 private loan to help their child pay for their education.
The Takeaway
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. Check if your preferred school offers a tuition payment plan. Many do.
Sometimes, the burden of tuition is still too high, even with a payment plan. Scholarships and grants, work-study, and federal aid can help you cover the cost of tuition. If you’ve exhausted all federal aid options, private student loans can fill gaps in need, up to the school’s cost of attendance, which includes tuition, books, housing, meals, transportation, and personal expenses.
FAQ
Are college tuition payment plans the same thing as tuition installment plans?
Yes, college tuition payment plans are also called tuition installment plans.
Do college tuition payment plans cover all school-related costs?
Typically, payment plans only cover tuition and fees. This means you may be responsible for the cost of books, supplies, housing, food, and transportation. Check with your preferred school to find out what its plan covers.
Do college tuition payment plans charge interest?
These plans don’t typically charge interest. However, you may be required to pay a modest fee to enroll.
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