How to Use Financial Aid with University Payment Plans

What Is a University Payment Plan?

Here, we’ll discuss how financial aid and payment plans make college more affordable. We’ll also discuss the benefits and steps of combining them. You’ll agree that, indeed, college costs don’t have to be a hindrance in achieving your dreams of a better life.

Let’s start with the definition and primary features of university payment plans. These are financing options that enable students to manage their college costs. The financing options available usually include:

• Installment plans allow students to pay their tuition and fees in smaller amounts. Without installment plans, students must pay their tuition and fees in one lump sum. With installment plans, monthly installments are possible over a semester or academic year.
• Deferred payment plans allow students to postpone their payments to a later date. The “later date” can be a specific date or after the release of financial aid.
• Pay-as-you-go plans are flexible payment plans suitable for part-time students. Students can pay based on the number of enrolled courses or a per-semester basis.

Installment plans are the most popular because they make payments more manageable by:

• Spreading out payments, usually on a monthly basis. Monthly, regular payments make it easier to budget.
• Avoiding a large lump sum payment in one go. Instead, a small enrollment fee for an installment plan is all it takes. You can use the money for books, supplies, and other expenses.
• Skipping the interest payments. Most plans don’t charge interest, but there may be fees for missed payments.

Many students also enroll in deferred payment and pay-as-you-go plans. These plans help to cover costs while waiting for the release of financial aid.

Of course, all these payment plans are designed to ease financial stress. Their flexible terms make college education more accessible.

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• The Role of Scholarships in University Payment Plans
• Tax Strategies for Families Using University Payment Plans

Types of Financial Aid You Can Use

Every college student wants to know how to pay for college. This isn’t surprising considering the rising costs of college (i.e., tuition inflation).

Average tuition and fees ranged between $11,011 (resident) and $24,513 (non-resident). Private colleges charged even higher – an average of $24,513 (2024-2025).

Of course, financial aid is among the best ways to pay for college. Scholarships and grants are free money, after all.

Here’s a quick look at the types of financial aid you must look for:

Grants

These are need-based financial aid that don’t have to be repaid. The best examples of grants are:

• Federal Pell Grant, a need-based grant for undergraduate students. Award amounts vary, but the maximum award amount is $7,395/year (2024-2025).
• The FSEOG (Federal Supplemental Educational Opportunity Grant) is a need-based grant for undergraduate students, too. Award amounts vary between $100 and $4,000/year.
• TEACH Grant awards up to $4,000/year to aspiring teachers.

Check out grants awarded by your state and college.

Scholarships

These are available in one of two main types – need-based and merit-based. Merit can be based on academic achievements, athletic skills, artistic talent, or leadership.

Colleges, nonprofits, and charitable organizations offer scholarships. Check out government agencies, too.

Both grants and scholarships can apply to direct and indirect costs. Be sure to understand their terms and conditions (e.g., grade requirements and renewal).

Federal student loans

These can be considered financial aid, too, because of their more flexible repayment terms. Funds are applied to tuition, fees, and room and board. You may receive a student loan refund if there’s an excess.

Work-study opportunities

These are part-time, paid jobs for students, either on- or off-campus. The wages you earn can be used for your college costs at your discretion.

Filing your complete and accurate FAFSA on or before the deadline is the first step. The FAFSA is the key to opening federal financial aid, including the Pell Grant and FSEOG. Many states, colleges, and private organizations also use it for their need-based programs.

Apply to as many non-federal scholarships and grants as you can, too. Start with local businesses, nonprofits, and charitable organizations, and your college. Expand your search by using online scholarship databases, such as FastWeb.

The higher the amount of your financial aid, the lower you’ll pay through a payment plan. If you’re a savvy planner, you may even end up with zero tuition and fees. Look for full-tuition scholarships.

You’ll then only pay for your room and board, required books, and other charges on your college bill. Then again, full-ride scholarships can cover these costs, too.

But if you still have a remaining balance or you can’t cover everything, there are payment plans.

Can You Use Financial Aid and a Payment Plan Together?

Yes, of course! In fact, we strongly recommend combining financial aid and tuition plans. You’ll find that doing so makes college more affordable and accessible.

Here’s how it works. 

• Your financial aid is applied first to your student account. Grants and scholarships, along with student loans, cover tuition and fees. In some colleges, these can cover room and board, too.
• You can have the remaining balance enrolled in an installment plan.

If your financial aid is delayed, you may want to consider a deferred payment plan. You’ll then stay enrolled while waiting for its release.

Let’s say that your tuition and fees are $7,000 for the academic year. Then, you received $3,500 in scholarships and grants, as well as $1,500 in federal loans. Your remaining balance is $2,000 for the academic year.

You can apply for an installment plan where you’ll pay $500 over four months. This way, you can budget for it and enjoy less financial pressure.

Steps to Combine Financial Aid with a Payment Plan

If you’re a newbie, you should consider working with your college’s financial aid officer. You’ll receive support and guidance to navigate the process. But you can keep these basic steps in mind when combining financial aid and a payment plan.

Step 1: Accept your financial aid offer.

Again, scholarships and grants are the most affordable ways to pay for college. You must then accept your financial aid offer by confirming it. Log in to your student portal. Check and accept the awards listed.

You can accept all or part of your student loans (i.e., get only what you need). But you’re well-advised to accept all scholarships and grants as these are free money.

Step 2: Review your tuition bill.

Check and review your account summary or tuition bill. You’ll see how much your financial aid offer covers and your remaining balance. This way, you’ll have a general idea of the best type of payment plan for this year.

Keep these tips in mind when reviewing your account summary.

• Look for charges that shouldn’t be in your tuition bill (e.g., optional fees, hidden charges).
• Request for waivers or adjustments on your tuition bill.

Step 3: Enroll in a university payment plan.

Your best bets are interest-free tuition plans because there are no additional charges. You’ll only pay for the remaining balance.

However, it will depend on your circumstances. Deferred payment and pay-as-you-go models have their advantages.

Regardless of your choice, here are tips to keep in mind when enrolling in a payment plan.

• Sign up ASAP.
• Know the terms and conditions.
• Set up automatic payments, if possible.

Step 4: Apply for aid first and pay the rest in installments.

Check that all your financial aid has been applied to your tuition bill. If there’s pending financial aid, you must consider its impact on your net tuition bill.

Benefits of Using Both Together

Combining your financial aid offer and one of the college payment options brings these benefits.

Reduces out-of-pocket costs

Your grants, scholarships, and student loans will decrease your out-of-pocket costs. When these are applied to your tuition bill, you’ll have a smaller balance to pay. Then, a payment plan allows you to spread it out over, say, a semester.

Avoids large upfront payments

You’ll feel overwhelmed if, say, you’ll pay your $2,000 net tuition bill in one go. But if you can pay it in $500 monthly payments, it’s more manageable.

Limits the need for additional loans

Since most of your tuition bill is covered by financial aid and the remaining balance by a payment plan, there’s less need for additional student loans. It keeps you from incurring more student loans.

Increases flexibility in budgeting

With flexible tuition payment plans, you’ll have more leeway in your budget. You can align your monthly payment, for example, with your cash inflow (e.g., part-time job income).

All these benefits boil down to one thing – reduced financial stress. You can then focus more on your studies and achieve your academic goals.

Tips for Staying on Track with Payments

Even the best intentions to pay on time can go awry. You may forget due dates or miss reminders. Unexpected financial issues happen, too.

You can avoid missed payments by remembering these tips on how to budget for college tuition payments.

Create a monthly budget.

List down all your income and expenses every month. Be sure to include your monthly installments for your remaining balance.

But be flexible in your budget, too, because unexpected issues happen. Adjust your monthly budget as needed, but prioritize your monthly installment.

Set payment reminders.

College life can be hectic – balancing your studies, extracurriculars, and part-time work isn’t easy. More often than not, you’ll forget the due date on your monthly installment.

You can avoid penalties on missed payments by setting payment reminders. Use your smartphone’s calendar and alarm features for this purpose. If necessary, you can also highlight your due date on a traditional calendar.

Enroll in auto-pay.

Ask your college’s financial aid office about setting up automatic payments. You can do so with your bank account or credit card, whichever is most convenient. Even if you forget your due date, you can rest easy knowing that your payments are always on time.

You must obviously ensure that your bank account has sufficient funds or your credit card hasn’t reached its limit. Otherwise, you’re likely paying penalties.

Check your account balance regularly.

Do so at least once a month so you can review for errors and updates. You can spot them ASAP and act on them as needed.

Who to Contact for Help

There’s no need to navigate the process of combining financial aid with a payment plan alone. There’s no shame in asking for help, either. In fact, you’ll find that professional guidance leads to more informed decisions. 

Here are the best resources that you can turn to for help in combining your financial aid with a payment plan.

• Consider your college’s financial aid office as your first resource. Learning more about your financial aid eligibility and requirements starts here. You’ll also get answers to your questions about your financial aid offer and release.
• Contact your college’s bursar’s office, too. You’ll find answers to your questions about tuition billing and payment plans here.
• Work with counselors in your college’s student success center and/or financial literacy center. You’ll know effective strategies to manage your finances. Ask about financial planning and budgeting tips.
• Contact your college’s academic advising office, too. Ask about available resources in case of financial hardships. Work with an academic advisor to adjust classes for cost-saving purposes.
• Communicate with the online payment portal help desk for technical issues.

You should also consider asking your parents for guidance. Even your peers, especially those who have experience with the process, can provide useful insights.

Final Thoughts: Considering Your Financial Future

In conclusion, combining financial aid and a payment plan isn’t only about your short-term finances. More importantly, it’s also about securing your financial future. You can decrease your student loan debt after graduation if you’re savvy about combining them.

Of course, in the short-term period, you can focus more on your academic progress. It is also crucial to earn your degree with less financial stress.