College tuition bills typically are due around August 1st. That may feel like a long time away, but you need to start coming up with a plan on how you will pay that tuition bill soon.
Your child will most likely start receiving college acceptance decisions next month, if they applied through regular admission. With those will come financial aid award letters. Financial aid awards have historically been a tricky thing for parents and students to decipher. What your college includes in the award can be different from what another college includes, so if you need help with your comparison, make an appointment with the College Planning Center.
Once your child has made an enrollment decision, you will need to figure out what your resources are for paying the tuition bill. Here are some common means for paying tuition bills:
1. Pay for what you can with free cash for college: grants and scholarships.
Grants and scholarships are the best way to pay for tuition since it doesn't come out of your own pocket, and it doesn't need to be paid back. If you qualify for these, take advantage! Keep in mind there is still time to apply for local scholarships.
2. Use your savings.
If you have saved a sizable chunk of cash for college, good for you! Using savings to meet tuition costs is an obvious next step.
3. Will your salary help you cover some tuition costs?
Tuition payment plans are available at most schools these days. They typically have low initiation fees and allow you to pay the balance or a portion of your tuition over the course of the academic year, rather than in one chunk. Just keep in mind fees for making late payments can be very high so don't be late if you take this option!
4. Student employment.
While a full-time job can prevent a student from keeping up with their studies, part-time work has been shown in some studies to actually improve student performance. A part-time job, on campus or off, can help your family cover living expenses, the cost of books and may even help with tuition. If your child has received a work-study offer in your financial aid award letter, make sure to talk to the financial aid office about the procedures for getting a job. If your child didn't receive this award, he or she can still earn cash by working part time on or off campus.
Borrowing should be your last resort for paying tuition. You want to borrow as little as possible. Doing so can sometimes result in having to make some tough decisions. If your child wants to go to one school much more than another, but will have to borrow much more, he or she needs to really understand how much it will cost them after graduation and assess if it is worth it.
If you do need to borrow, your first option should be the Federal Direct Subsidized and Unsubsidized loans. These loans will be included in your financial aid award letter as long as you completed the FAFSA by your school's deadline. These loans have low interest rates and very flexible repayment options so they are a great option for students. However, they also have annual loan limits, so they often times are not enough to cover the remainder of the tuition bill.
If the school awarded the student a Federal Perkins Loan, this is also a good option with repayment flexibility and a 5% interest rate.
Next, you can consider a Federal PLUS Loan, a state-based education loan (such as the loans RISLA offers), a private education loan, or a home equity loan. Which option works best for your family depends on your personal circumstances.
To come up with a plan for paying your tuition bill, use our Paying for College Calculator. For information on college borrowing and how to compare loan options, download RISLA's Guide to Student Borrowing.