My D has put down the deposit, and now we can look forward to paying. Any advice on the best ways to do that? I have heard that some people pay by credit card and then accumulate points, etc… Can four years tution be paid as a lump sum and then we won’t have to pay any increases in tuition? Is there a beginner’s thread on this kind of info? I am not seeing anything obvious, so please forgive my ignorance.
Payment policies are usually laid out by the school. I would not pay more than a semester at a time. That way, if you child has to withdraw or even decides to transfer, you’ don’t have to try to get your money back from the school.
Lots of schools aren’t going to let you pay with a credit card without some kind of added fee. The vendor on their end are too high. FWIW, I had an accident and needed a car before I got the settlement check from the other guy’s insurance. The dealer wouldn’t let me buy a car with a credit card, either, because of the amount of fees it would have incurred from the transaction.
Wait for the bill. Make sure all fin aid has been applied. Then pay.
At my D’s school payment plan had a fee and credit card payment had a fee.
We did an electronic bank transfer which was free.
If the student has the option of taking out subsidized student loans that might also work.
Finally if the student is working in summer and you don’t want the job earnings in the bank to affect EFC this October when next year’s FAFSA becomes available, use student earnings towards the first semester bill.
My D was also reminded to accept/deny aid in the student portal before June.
Both schools I pay allowed credit card payments without fees the first year, so that’s how I paid. Then one surprising changed that policy without telling me the second year, so when I went to pay by credit card I quickly had to pay by bank transfer. Some people have 529 funds sent directly to the school.
I couldn’t pay in advance because I don’t know what the costs will be. One school charges by the credit, so I’d have to know if she was taking 15, or 16, or 18. Other school raises tuition all the time, and the FA changes too. Schools that increase tuition increase tuition. Only a few guarantee that they not have increases. You wouldn’t want to have $200k prepaid anyway as you can certainly get some return on that money through a CD or in a 529 account.
That’s exactly what we did for D2. Didn’t know about the option for D1. You’re earning tuition inflation AFTER-TAX, which would be very hard to do in a safe investment before tax. Great deal if you can swing it. Also paying directly to the college doesn’t incur gift taxes, however, if you already have a 529 and try use it to prepay, only of the part of the payment for the current tax year would be considered qualified expenses. Thus you could incur huge tax penalties ruining the whole plan. Best if using after-tax cash.
Other options I looked at
www.privatecollege529.com - We used this for D1’s senior year of college by buying this right after she deposited senior year in HS. We got tuition inflation for 3 years.
Colorado 529 Stable Value Plan - 2.54%
Virginia 529 plan - have FDIC options - rates have been lowered to where it’s not that great, but they were 2.25% when I started in 2014. This was a small amount for just room and board.
We did the monthly payment plan for 10 months of the year. This was set up through a payment plan company recommended on the college website. We used TuitionPay, and one other.
It was auto withdrawal from our bank account for 10 months of the year. For us, it just made cash flow better as we were paying primarily out of my current earning.
@ClassicRockerDad , thank you! I was also looking at the credit card thing, but seems that many colleges, including D’s, wised up to that and now use a service that charges a fee, thereby negating any points accrued. If anyone else has any ideas, please share.
I think they all have a monthly plan of some kind and the fee is usually small, maybe $50/semester?
My kids’ schools charged 3% for CC use. Since my rewards are 2 points per dollar, it made no sense to use it.
Never mind.
^^I don’t think so. Why would you think it qualifies?
We just do electronic transfer.
My kids’ schools don’t even offer credit card, but I would only do that if it were free—which would be awesome, imagine the points!
I don’t really know if there is much advice to give here. It’s either pay by semester or monthly…
I didn’t think it did; it was just wishful thinking. I was just asking. Thanks. I removed my question; please don’t derail this thread by bringing it up again.
We used the monthly plan at the college my D1 attended; small fee, and we could spread the payments out.
Thanks everyone. It seems that monthly payments or electronic transfers are the way to go.
bummer to hear of fees regarding credit card payments. I was envisioning massive Citi Rewards points balances!
There must be some sort of work aorund where we are handsomely rewarded for forking over all of our dough, right?
@RightCoaster You would think! I am sure if you wanted to, you could sign up for a bunch of credit cards and get bonuses every time you spent a certain amount within a period of time. I did a little research whihc said as much, but then you run into the problem of trying to manage a lot of credit cards, and if you then try to cancel them, it is bad for your credit rating. If you can figure out a workaround, please share.
I only have 1 card that I use. Everything we buy goes on it. It never occurred to me that colleges would not accept it it in todays digital age. Electronic payment out of my bank account is so boring and " unrewarding".
We’ll have to figure out some kind of hack. I will be looking into this and will post up any findings.
These are not mutually exclusive (or did you mean to say “and”). You can choose the frequency (monthly or semester) and the method (check, electronic transfer etc.). The choices, of course, can be different at each college.