Colleges and universities understand that many families may not have the resources to pay the college bill in one payment. Families can use a variety of ways to cover college costs, including savings, financial aid, and student loans. But in addition to these options, a great alternative that many institutions offer for bill payment is the monthly payment plan.
Monthly payment plans provide families the opportunity to pay for college costs over the course of several (generally 10–12) months. Unlike loans, there’s no interest charged or credit check required, and signing up only requires a one-time enrollment fee (usually in the range of $50-$85).
Most colleges partner with a third-party provider to offer these plans, and setting up the plan is usually pretty simple. The timeline can begin as early as May, so you’ll want to find out the details of how the plan works at your child’s selected college soon after you submit the deposit. The Financial Aid or Student Accounting Office can provide further information. Usually the college will credit the first half of your payments toward your fall semester bill, and the second half of your payments toward your spring semester bill.
If you need assistance calculating what you’ll owe for college costs in order to determine your payment plan amount, use MEFA’s College Cost Calculator. You can type in any financial aid received and other resources you plan to use, and then determine the remaining cost to your family. Then you can determine how much of that amount to cover with a payment plan. Families that use a payment plan often end up borrowing less to meet college costs.
For example, if your remaining cost at the school is $10,000, but you know you’re able to pay $300 per month into a payment plan of 10 months, then that’s $3,000 you’ll have covered of your $10,000 bill, and $3,000 you won’t have to borrow and pay interest on over a repayment term of 10 or 15 years. And remember, college is usually a four-year enterprise, if not longer.
Minimize your borrowing and future costs with a monthly payment plan—a smart way to pay for college. For questions about monthly payment plans or paying the college bill, contact us. You can reach us at (800) 449-MEFA (6332) or [email protected].
