‘help I Can’t Pay My Tuition’
You’ve got your course schedule for the semester, your packing is all done and then, all of a sudden, you realize, “Help! I can’t pay my tuition!”
Most students fund their education through a variety of sources, like scholarships, grants, and loans. Sometimes, however, there’s a last-minute financial gapa remaining few hundred or thousand dollars that you still have left to pay. When you need help paying college fast, applying for scholarships isn’t going to cut it. But there are a few things you can do. Here’s our step-by-step guide on what to do when you’re in a financial pinch just before your next semester.
1. Get an extension
Before you do anything else, call your college’s financial aid office and ask for an extension. Because you’re nearing a deadline for payment, you want to make sure that you have some extra time to sort things out.
Save Money Ahead Of Time With A 529 Plan
Saving up is one of the best ways to pay for college. While you can save money using a regular savings account or taxable investment account, a 529 plan can help you gain a tax benefit as you set money aside for school: The funds can eventually be used tax-free for qualified education expenses.
The longer you have to save up, the better off youll be. Generally speaking, parents who started contributing to a 529 plan 10 years ago should have almost enough money in the account to pay for two years of college.
Not everyone starts saving when their children are at a young age, so its important to look for multiple savings strategies. Keep in mind that 529s rely heavily on stock market returns, so its wise to have backup savings in case of a downturn before college.
There are times when withdrawals from a 529 count as part of a students income when filling out the annual Free Application for Federal Student Aid . That said, it can make sense to put off using money from a 529 account until later in the students college career.
Withdrawals during freshman and sophomore years can affect financial aid awards. Run the numbers to see if it makes sense to use funding from other sources during the first two years of college.
Companies That Offer Tuition Reimbursement
Even though reimbursement conditions might differ from one employer to the next, its still good to be aware which companies offer this benefit when youre on the job hunt.
Here are a few of the companies that offer tuition reimbursement:
- Target up to $5,250 for an MBA degree
- UPS up to $25,000 in tuition assistance
- Home Depot up to $5,000 annually for tuition assistance
- Starbucks full tuition covered for a bachelors degree through Arizona State Universitys online program
- Chipotle up to $5,520 in tuition reimbursement
- Wells Fargo up to $5,000 in tuition expenses annually
- Amazon up to 95% of tuition fees for in-demand degrees
- AT& T up to $25,000 in tuition reimbursement after one year with the company
- Verizon up to $8,000 annually in tuition assistance
- Intel 100% reimbursement for courses taken through Intel University
- Proctor & Gamble up to $40,000 tuition reimbursement for pre-approved courses
- Deloitte full reimbursement on graduate studies after two years with the company
- FedEx up to $5,000 annually in tuition assistance
- McDonalds up to $3,000 annually in tuition assistance
This list isnt exhaustive and is subject to change, so its best to check with an HR manager to see what the current offer is for tuition reimbursement.
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Get On A Payment Plan
Not all colleges expect you to pay their tuition in a lump sum. Many schools work with students to space their payments out in monthly installments over the semester or even the calendar year. Sometimes schools charge more for monthly payments, an enrollment fee or a down payment for a percentage of your tuition, fees, etc. Some work with external companies that provide this kind of financing. Contact your financial aid office to learn about your school’s options.
If your parents are helping you pay for school, payment plans may also make it easier for them to contribute because they can allocate a certain portion of their monthly budget toward the bill rather than paying in a lump sum.
Universities That Dont Charge Card Processing Fees
On the other hand, if you can pay your tuition with a credit card and not incur an additional service fee, then you absolutely should do it and be grateful that you can!
Just be sure that you can pay off the entire amount when your statement comes due, which is my number one commandment for credit cards. If you cant and must carry a balance, any interest and finance charges will easily cancel out the points or miles youd earn on the purchase.
Unfortunately, the number of schools that fall into this second category is relatively small. In fact, I went through U.S. News & World Reports list of the top 100 national universities in the country and found only five that allow no-fee credit card payments for tuition:
- State University of New York Binghamton
- SUNY Stony Brook
- SUNY College of Environmental Science and Forestry
- SUNY Buffalo
Note: It appears that most, if not all, state universities in New York dont charge fees for paying with a card, so if youre looking at or already attend one of these schools, youre in luck!
There are other exceptions I found for certain classes of students. For example, part-time students at Boston University can pay via credit card with no fee, as can most graduate students at Northeastern.
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Research Scholarships And Grants
A money-saving strategy that does not require postponing college is to apply to schools where you have unique characteristics they seek. For example, you might have an ethnic background that a school is looking for, a compelling academic expertise, or play a sport or a musical instrument that makes you stand out. Schools that see you as a valuable addition due to an unusual skillor have bequests that support students with your characteristicsmay provide a scholarship. Also look for national-level grants, such as the Pell Grant, to see if you qualify to apply.
Another tactic is to work in a field where you may be paid to go to college. Some companies provide tuition reimbursement or support for advanced training. So does the militaryand some of those benefits are also available to spouses and dependents of service members.
A third technique is to look into an income share agreement. These plans lend you money now, in return for a share of your future income for a specified period of time. These plans differ according to your major and your college. Some plans have been accused of racism in their offers.
Compare And Choose A 529 Plan
A 529 college savings plan is designed to allow you to set aside money for educational expenses. The money that you save grows tax-free and can be withdrawn tax-free too, as long as theyre meant for covering college costs, so opting for a 529 plan is probably one of the most convenient tips you can use for paying for college.
However, some plans can vary dramatically on fees, investment options, and return rates, so make sure you compare several plans in order to find the one that works best for you, since you can invest in any states 529 plan, not exclusively your home states one.
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Federal Vs Private Student Loans
Even after considering the above financial assistance programs, you may still need additional help to pay for college through either federal or private student loans, or a combination of the two.
Federal student loans are made and guaranteed by the Department of Education, including: Direct subsidized loans, Direct unsubsidized loans, and PLUS loans. Private student loans, however, are provided by banks, credit unions, and other private lenders with varying rates and terms — and they dont offer the same protections for consumers.
Here are the key differences between these two types of loans.
Federal Student Loans
Through federal Direct Loans, you may also qualify for a public service loan forgiveness program if you work full time for a qualifying public service employer and make 120 qualifying monthly payments.
Whats An Installment Plan
An installment plan isnt a brand-new concept. You may have used an installment plan to pay back a loan. It simply means you pay for an item in fixed amounts at specified intervals you make small payments over time.
An installment plan for college can have several different names:
- Monthly payment plan
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Review Your Financial Aid Award Letters
What is a financial aid award letter?
- Financial aid award letters arrive around the same time as admission offer letters. Assuming that you remembered to list them on your FAFSA, every college that offers to admit you should send you a financial aid award letter.
- The letter should provide all the information you need to compare the net price of attendance at all the schools youre considering.
How to compare financial aid award letters
- Financial aid award letters can be difficult to compare because some schools dont provide a total cost of attendance or make clear that loans are aid you have to repay. Here are some examples of how the letters might look and how you can compare financial aid award letters.
- RaiseMe makes it easy to determine your net cost of attendance for college with their Interactive Financial Aid Award Letter tool.
Working While In School
If your goal involves paying for college tuition without loans, work-study programs or freelancing during school could help cover the costs of college and likely should be a top option after exhausting scholarships, available savings and family contributions.
Federal work-study programs might be an option for undergraduate, graduate and professional students who are attending school full-time or part-time and who have financial needs. Jobs through federal work-study programs often involve doing work related to your studies or community service work, which makes these jobs a great way to earn money for tuition while also building your resume.
However, youll need to make sure your school participates in the federal work-study program by checking with the financial aid office, and youll need to both qualify for a work-study job and be able to find a job.
When your school provides information on your financial aid package, youll be offered a federal work-study award if you are eligible based on financial need. You can find out a lot more about federal work-study programs by reading our guide.
There are also a number of side hustles you could do while attending school, and with careful budgeting, working during school might make college affordable without loans especially if the school offers a flexible or monthly payment plan.
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It Makes Sense To Earn More Valuable Points
Another time you should consider swiping a card for tuition is when the points or miles youd earn are more valuable than the fees youll incur. This is a very gray area since everyone has their own way of valuing the various loyalty currencies out there.
A good place to start is our monthly valuations to get a ballpark of how much you can get out of your points and miles. However, keep in mind that these valuations typically apply to redeeming points for maximum value, especially when it comes to transferable point currencies, so the math may not make sense if you redeem your points directly.
Here are a couple of examples of when the points or miles youd earn would outweigh the additional fee:
As always, be sure to adjust these numbers based on your own valuations and evaluate your schools credit card payment policy to determine whether it makes sense to incur the fee.
Paying A Fee For Using A Credit Card
Where things get more complicated is the third category. Of the top national universities, 65 allow payments with fees that range from 2% to 2.99% .
So, should you incur a fee to pay college tuition with a credit card? As is the case with much of what we cover here at The Points Guy, the answer isnt absolute: Yes, but only in certain circumstances.
Lets take a look at where it would make sense.
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External Awards & Scholarships
There are a lot of people who want to help you succeed. Every year organizations, including companies, clubs and associations, distribute student awards. These groups provide funding based on their own sets of criteria that can include financial need, academic standing and others. Awards also exist for students with disabilities or exceptionalities.
Watch the video for details.
Colleges Fall Into These Categories
Generally speaking, the college or university in question will fall into one of three categories:
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Aid For Military Families
Many types of student aid are available to military personnel, veterans, and their families. There are also reserve training programs and scholarships available through most branches of the military.
- Over 1,000 colleges participate in Reserve Officers Training Corps programs.
- Army, Air Force, Navy, and Marine ROTC programs all offer scholarships.
- The Department of Veterans Affairs GI Bill offers education benefits for vets, their dependents, and widows.
- Children of Iraq and Afghanistan service vets who died in combat after September 11, 2001 qualify for multiple additional education benefits.
- Low-interest and no-interest educational loans are also available to military personnel and their families.
What Are The Drawbacks Of Using A Tuition Payment Plan
While tuition payment plans for college can be a great deal, there are drawbacks. Usually, the biggest one is that the full semester or quarters balance has to be paid in full by the end of the term. Students cant defer until they graduate, something that they have the ability to do with most student loans.
Since students cant defer, they will commonly need a source of income while they are attending classes. Many students find that having to work and study is challenging, and it may not be ideal for students who want to take larger course loads.
Next, while the setup fees are modest, they are an added expense. There can be other fees, too. For example, the college may charge extra to take payments by credit card, or there may be a late fee for a payment after the due date.
Finally, unlike student loan interest, any fees a student pays while using a tuition payment plan arent tax-deductible. In most cases, this is a small drawback, but it is one, nonetheless.
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How Does Paying For College Work Your Guide To Tuition
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Speak With The Financial Aid Office About Your Options
Each individual college has its own policy for tuition payment plans. If youre interested, ask your schools financial aid office about your options.
As you research and apply to schools, make sure to consider the cost of tuition. By understanding the costs and how to cover them, you can make the best choice for your educational future.
Maya Dollarhide contributed to this report.
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Aid For Foster Care Youth
Children in foster care age out of the system on their 18th birthday. While many students receive financial aid from family into legal adulthood. To aid students who are unlikely to receive aid from parents or relatives, public and private programs offset the financial burden of higher education.
- Educational and Training Vouchers for current and former foster care youth are available through the John H. Chafee Foster Care Independence Program.
- Students may receive up to $5,000 each year they are in school through the program.
- Aid is available to former foster youth up to the age of 21.
- States have varied processes for ETV program application submissions.
- The Foster Care Manager at any state Child Welfare Agency has more information about how to apply for an ETV.
- Some states also offer tuition waivers.
- Additional programs are available through DHHS.