Your tuition deadline has passed, but you still have a balance due on your account at your college. What do you do? We are here to help with this list of do's and don'ts for paying the balance on your tuition bill.
DON'T default to putting your balance on your credit card. Maybe your intention is to earn some points on your card and then pay off the balance right away, but if something comes up and you aren't able to, you could be stuck paying 10-25% interest on that balance. Plus, many colleges have caught on that families use their credit cards to pay tuition bills to earn rewards, so they typically charge a 3% transaction fee for taking your tuition payment via credit card. If you need to make a tuition payment ASAP to secure housing or classes, use your credit card only for what is necessary to secure your place and pay it off fast.
DO fund what you can with savings. Have a 529 plan in the parent name? Many parents are afraid to use up all the money in their 529 plan in a single year. However, using as much as possible in your first year can benefit you in two ways: 1) those savings won't be included in your Expected Family Contribution (EFC) for the next year so your EFC could be less than during year one, and 2) you may be able to borrow less (or not at all) by using your 529 plan funds to cover college costs, which means you will accrue and pay less in student loan interest during the first year of college. As a rule of thumb, you want to pay as much as you can early on with your parent-owned 529 plan before turning to borrowing. The exception to this rule is 529 accounts in the grandparent's names. Typically, it is best to reserve these funds until junior or senior year of college, because distributions from them are considered student income in future years, which could drive up your EFC if you use these funds during freshman or sophomore year.
DON'T continue to avoid your tuition bill because it could prevent your student from enrolling in classes and end up costing you more in the long run.
DO call the school to see if you have been hit with a late charge. If so, ask if there is anything you can do to waive it. The answer may be no, but it doesn't hurt to put the question out there.
DO compare borrowing options instead of making a last minute panic decision. Don't just take the easiest path because you want to be done with it. Instead, take a deep breath, spend an hour researching your options online (you can start here) and figure out what the best deal is for YOUR family.
DON'T be afraid to ask for help. Free help is available at the RISLA College Planning Center. Our counselors can help you compare your options and come up with a plan for paying that bill!