Students and
families have many choices to help them meet educational
expenses that are not covered by financial aid. One great
option that many colleges offer is an interest free, Monthly
Payment Plan. While there are differences among plans,
general features of monthly payment plans include:
-
The option
to pay educational expenses over time without interest
charges.
-
A one time enrollment/application fee (usually $50 - $100)
-
Optional insurance (in case of unemployment, disability or
life for example) in case the applicant becomes unable to fulfill
the terms of the payment plan
How these
Plans work:
Generally,
colleges and universities work with a payment plan company
that administers a plan (manages billing, processes
payments, and provides customer service to students and
families) for the college. The college, through either the
financial aid office or billing office, will provide
information about this company and terms of the program
offered at the school. Many of these payment plan companies
have Internet sites that can help answer questions and
provide interactive planning tools.
There are two
main benefits to using a monthly payment plan
1. No interest
charges - These programs provide an interest free option to
manage educational expenses.
2. Spread out costs over
a number of months - Rather than paying educational
expenses in one lump sum, these plans effectively spread out
payment over the student's period of enrollment.
Who benefits
from a monthly tuition plan?
These plans
are generally a win-win for a family and colleges. Families
that have sufficient income can benefit from the
"same as cash" price of education while not having
to manage one or two large payments per year.
Additionally,
these payments may be deductible… (See Tax
Cuts). Contact your school for more details.
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