Navigating Payment Plans for Students with No Financial Aid

What Is a College Payment Plan?

Here, we’ll discuss university payment plans for students without financial aid. This is a timely discussion considering tuition inflation (i.e., rising college costs). In-state annual tuition and fees total $11,011 on average – and it’s only 40% of the cost of attendance. Indirect costs, such as room and board, books, and living expenses, make up the other 60%.

Suffice it to say that paying for college without financial aid is a real challenge. In a traditional payment system, you must make a one-time lump sum payment. Without it, you can’t be enrolled in courses in your degree program.

This is a real struggle if your college bill, say, amounts to $15,000 for the academic year. You can take out student loans from private lenders, but that’s a trap. The typical college bill includes tuition and fees and on-campus room and board.

Fortunately, there’s hope in the form of university payment plans. These are alternative financing options that enable college students to make installment payments. Instead of paying your $15,000 college bill in full, you can spread it out over a period of time.

Colleges and universities usually offer two installment options.

• Monthly installment plans are more common because of their ease and convenience. You’ll pay a fixed monthly amount for 4-6 months (i.e., a semester). So, for a $15,000 college bill, the monthly payment will be $2,500 for six months.
• Semester-based plans require two major payments instead of several monthly payments. You’ll pay, for example, at the start of the semester and then another one mid-way through the term. So, for a $15,000 college bill, you’ll pay $7,500 at the start and another $7,500 mid-way during the semester.

Other notable features of these tuition payment options include:

• Low or no interest. But check the fine print for a small enrollment fee and fees for missed payments.
• Online application, payments, and cancellation, usually through the college’s website. Third-party providers, such as CashNet or NelNet, may also be used by colleges.
• Covers tuition and mandatory fees. Check if your college allows coverage of on-campus room and board and health insurance. 

So, is a university payment plan helpful for you? Yes, it can be, but you must consider your needs and goals first. You should also remember that it comes with responsibilities. Missed payments, for example, can result in late fees, even suspension.

Related Articles:

• Navigating Payment Plans for Students with No Financial Aid
• Private Loans vs. University Payment Plans: What’s More Cost-Effective?
• University Payment Plans for Low-Income Students
• Federal Loans vs. Payment Plans: Which Should You Use First?

Who Can Use a Payment Plan?

The beauty of college payment plans is their inclusivity. Every college student who meets the eligibility requirements can apply. While eligibility requirements vary between colleges, the common ones include:

• Currently enrolled as a student at the university.
• Meets the number of credits enrolled in a degree program (e.g., full-time, part-time, half-time). Ask if your college allows students in non-degree and certificate programs to enroll in payment plans.
• In good academic and financial standing with the university. Maintaining satisfactory academic progress and without outstanding balance are the usual requirements.

University payment plans are particularly helpful for certain students.

Students Not Receiving Financial Aid

If you didn’t apply or didn’t qualify for financial aid, you should consider a payment plan. Financial aid includes federal and state student aid, scholarships, grants, and work-study.

You can split your total college bill into easy monthly or twice-per-semester installments. This way, you can avoid taking out student loans or borrowing lesser amounts. You’ll also have more time to earn money to pay for the installments.

Part-Time Students and Online Learners

Many of these students balance academic and family obligations that stretch their finances. With a payment plan, it’s easier to align monthly payments with a monthly paycheck cycle. There’s no need for large upfront payments, too.

Part-time students who take fewer credits find payment plans particularly useful. Fewer credits mean smaller tuition which, in turn, becomes more manageable via installment.

Commuter Students

If you live at home or in off-campus housing, you likely have lower indirect costs. But your tuition and fees remain the same whether you live on- or off-campus. Again, you can pay your tuition and fees through a college payment plan.

Out-of-state and International Students

Federal financial aid isn’t available for international students. Out-of-state students usually don’t qualify for in-state tuition and state-based financial aid. For these types of students, university payment plans make college costs more manageable.

Working Students

If you’re a working student supporting yourself, think of a payment plan, too. You can match your monthly payments to your monthly income.

Indeed, if you think that you’ll struggle with a one-time lump sum payment, consider college payment plans. Don’t be ashamed about it either – you’ll find that many of your peers are into them, too.

How Do Payment Plans Help with Tuition?

At first, no financial aid college options seem limited to paying in full or dropping out. This is particularly true for students from low- and middle-income families.

The good news is that payment plans pave the way toward earning your college degree. Here are the ways that payment plans help with tuition payments. 

Reduce Stress with Smaller and Predictable Payments

Among the best options for how to pay for college monthly is by enrolling in a payment plan. Instead of paying in a single lump sum, you’ll pay in smaller amounts. The predictable deadline and amount mean less mental stress and more time to gather resources. You can focus more on your academics, too.

No Need for Loans or Interest in Some Cases

Most college payment plans don’t charge interest on the principal (i.e., total college bill). The small setup fee is more affordable than the interest on private loans and credit cards, too. Even when a college payment plan has interest, it’s usually low.

You’ll then be less likely to take out significant student loans. With a payment plan, you can save on the cost of interest, too. Even your credit score will be better for it.

What to Know Before You Sign Up

Payment plans are among the most affordable ways to pay for tuition. But these aren’t without their disadvantages either. Limited refund options and non-coverage for certain costs are among them. Some colleges don’t offer flexible terms either.

Keep in mind, too, that signing a college payment plan is a commitment and responsibility. Negative consequences are possible with a breach of contract.

Missed payments can result in account holds, suspension of enrollment, and withholding of your diploma and transcripts. Defaults have a negative impact on your credit score if these are sent to collections. Your credit report will reflect them, too, for up to seven years.

So, before you sign up for a payment plan, set realistic expectations. Start by knowing what you’re signing up for.

Deadlines to Enroll and Due Dates

Check your college’s specific deadline to enroll in its university payment plans. The deadline can change from year to year, so it’s important to be aware. Missing the enrollment deadline can mean paying your college bill in full or paying a higher initial payment.

Once you’re approved for a payment plan, take note of your due dates, too. Again, a missed payment has negative consequences, such as a late fee. Many missed payments can lead to your account suspension, among other consequences.

Setup Fees and Late Fees

Many payment plans have a one-time setup or enrollment fee. This can range between $30 and $60 per semester, depending on the college policies. Yes, it’s a fairly small amount, but it’s a cost that you must consider. Plus, it will add up over the years of being in a payment plan.

Then, there are the late fees for missed payments. The amounts vary, too, usually from $25 to $50 per missed payment. Again, it’s an extra cost you must consider.

Take note of cancellation fees, too. You may want to drop out of the plan, or you were dropped because you missed many payments.

School-Specific Rules

Student payment plans for college have specific rules and regulations, too. Always read the entire contract before signing it. Ask clarificatory questions when you have doubts.

When reading the payment plan contract, look for these school-specific rules.

• What college costs are covered (e.g., tuition and fees only or direct costs plus room and board, etc.)
• How many times you’ll pay (i.e., payment frequency), such as monthly or twice per semester
• What are the special requirements and exceptions (e.g., emergency flexibility)
• How to make changes to your payment schedule or amount

The more you know about what you’re signing up for, the smarter your decision will be.

Tips to Stay on Track with Payments

Tuition installment plans have due dates on payments that should be followed. But it can also be difficult to stay on track with your payments. Irregular income, medical emergencies, and unexpected expenses are common reasons. Lack of budgeting skills and overspending are also often-cited reasons.

But you must stop using these as excuses for missed payments. Here are effective ways to make regular, on-time payments.

Track your income and expenses.

Create a realistic budget that considers your monthly income and expenses.

• List down all your sources of income (e.g., part-time jobs and family support). Then, list down your monthly expenses.
• Find ways to increase your income and decrease your expenses.
• Always set aside money for your payment plan.
• Set up an emergency fund.

Yes, it takes time, patience, and perseverance to stick to a budget. But the rewards – financial freedom being the best – are worth it.

Set up auto-pay.

If you want to be on track with your payment, an auto-pay setup is the best. You can link your payment plan to your bank account or credit card. You’ll avoid late fees and other negative consequences of missed payments.

Always ensure that your bank account has enough funds in it before the due date. If you’re using a credit card for autopay, check that you’re still within your credit limit.

But it’s still possible to miss a payment, such as when you have insufficient funds. In this case, set an alarm a few days before your due date. Check on your bank account funds or credit card limit.

Talk to the school if you hit a snag.

Life throws curveballs that put every well-intentioned plan awry. You may hit a snag, such as losing your job or getting sick, which will affect your payments.

Instead of dismissing your payment plan as secondary, take these steps. 

• Communicate with your college’s financial services office or bursar’s office ASAP.
• Explain your current situation honestly and openly.
• Work with your financial aid officer for a realistic solution. A temporary hold is possible.
• Take advantage of available, such as emergency grants. 

Don’t ignore the problem. Otherwise, it will lead to bigger issues.

Other Ways to Manage College Costs

In conclusion, payment plans are a great way to manage college costs. You can pay in smaller installments instead of paying a one-time large payment. But you should also be aware of the commitment and consequences that come with a payment plan.

Furthermore, you should adopt effective financial tips for college students to manage your costs. Being proactive is a must if you want to earn your college degree without crippling student loan debt.

Consider these effective ways to manage your college costs:

• Consider earning an associate’s degree at a community college first. Then, transfer credits toward a bachelor’s degree in a four-year university.
• Apply for scholarships, grants, and work-study programs later on. Look for year-round financial aid.
• Buy used digital textbooks to save money. Rent and share textbooks, if possible. Use library resources and OER websites, too.

Being smart about your college finances to avoid debt is a point of pride. Taking advantage of financial aid and payment plans is excellent for this purpose.