Paying for College on the Installment Plan
Write 10 or 12 checks instead of just one
Because the "amount due" at the start of each semester can be so daunting, hundreds of colleges now offer families the option of paying on an installment plan. The payment programs typically let families cover tuition, room, and board--or whatever is left of the bill after financial aid awards have been factored in--in equal monthly installments over the course of 10 or 12 months.
The delayed payments are generally interest free, although participants often pay an nominal fee each year (usually $40 to $75) to enroll. A few schools impose a finance charge instead; the University of Miami, for example, charges a fee of 3 percent of the amount to be paid in installments, or $300 a year for a family that finances $10,000. At most schools, any student, regardless of financial need, can participate in the delayed payment program. Some institutions, such as Georgetown and Johns Hopkins, administer the programs themselves; parents send their monthly checks directly to the bursar's office.
Most college, however, contract with third parties to handle the payments. Schools that have arrangements with these organizations-which include Academic Management Services, Key education Resources, and Tuition Management Systems-often send out enrollment information about the plans when they notify students of financial aid awards. Parents who sign up receive a coupon book or a billing statement each month and send their checks to the outside service-starting almost immediately after their son or daughter graduates from high school.
This story appears in the September 7, 1998 print edition of U.S. News & World Report.
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