Tuition payment plans are not loans; rather, they enable students and families to break tuition costs into monthly installments instead of paying for the semester or year in a lump sum. Payment plans are usually offered by vendors through the university.

Plan terms may be tailored to fit the needs of your family, including payment periods of three to 24 months.

Example: You have a tuition bill for $15,000 and the school offers a 10-month tuition repayment plan. Divide $15,000 by 10 and you will have to pay monthly installments of $1,500.

Automatic payments may be scheduled from bank accounts. Parents contemplating a tuition payment plan should consider the following:

• Interest rate. Many plans are interest-free, but ask about finance charges before enrolling.
• Fees. Some plans charge an enrollment fee.
• Credit eligibility. Credit check not usually required.
• Tax considerations. You may be able to deduct qualified education expenses for yourself, your spouse, or a dependent.
• Paying for all your children. Many families cannot afford tuition payments when more than one child is in college.
• Paying for school-related expenses. Does not include expenses in excess of cost of attendance, such as a commuting vehicle, travel home, furniture, and appliances.
• Deferment and forbearance clauses. Not applicable.
• Repayment. Monthly repayment amount is equal to the tuition balance divided by the number of months in the plan.
• Repayment plan options. Schools may offer plans that span from 3 to 24 months.
• Liquidity, emergencies, and other expenses. Tuition payment may be significant to the family budget, limiting funds available for emergencies.
• Lost retirement income and interest. Some families may have to suspend contributions to retirement accounts to make the monthly payments.

TuitionPay^® is the interest-free, debt-free way to spread tuition payments over a number of months.

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