Do Community Colleges Have Payment Plans?

Do community colleges have payment plans?

Yes, most of the community colleges do. Payment plans at community colleges are your best bet for easing tuition, making costs more manageable. Yet, surprisingly not everyone knows about them or understands how they work.

According to the Sallie Mae survey of 2021, “How America Pays for College,” nearly 80% of students or their parents eliminated a college for admissions based on cost.

Many of these students and their families do not realize that even if tuition seems a lot to pay all at once every year, the community college you prefer probably offers an installment plan that will break the payment into easily manageable installments.

So before you change your mind about a community college it might be worth your time if you have a talk with the college and see if their payment plan is something that will make that college manageable for you.

Furthermore, these plans are done for a small fee that does not usually exceed $100 to $200… a far better option than the interest students have to pay on student loans. These plans are also not very difficult to qualify for.

By the way, if you are planning on applying to community colleges, this in-depth guide will be very useful.

What is an installment or payment plan?

Payment plans are probably a familiar concept to you already. The idea is very simple - instead of paying for college or tuition at the start of the year, semester or quarter, you request the college to break it into equal manageable installments.

You may have asked for a loan payment in the past to be paid in installments this way, making smaller payments over time during fixed durations.

Payment plans also go by many names:

• Installment plans
• Tuition payment plans
• Monthly payment plans
• Deferred payment plans
• 12-month, 10-month, 8-month, etc., payment plans
  

Some colleges have a proprietary name for their payment plan but whatever they are called, they are all essentially the same thing. 

Certain colleges have even opted to have third-party service providers or tools like FACTS to manage the payments for them.

Besides the name, different community colleges offer their own customized plans and the installment terms may vary slightly from college to college.

This is why it is important to check with the college you are planning to apply to, in order to understand what the specific terms of their payment plan are.

What is covered in an installment plan?

Typically, these plans only cover direct costs charged by the college such as tuition and fees. Accommodation/lodgings and meal plans may or may not be included in the plans.

However, expenses like course materials, textbooks, stationery, and other school supplies are not usually included and you have to factor that in when planning to pay for college. Also, transportation is usually not included.

As mentioned earlier, the plans may require a small fee to be set up. This fee is usually around $50 to $100 but in some cases may go as high as $200.

Still, if you compare that to the absurd amount of interest students and parents are paying on student loans it is negligible. 

Many tuition payment plans require an enrollment fee, which may fall around $50 or $100, although it may be lower. 

These plans don’t usually charge interest, which can potentially make them less expensive than taking out a student loan, as long as you are able to make the monthly payments.

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How do the plans work?

Simply, once you are approved for the plans you need to make payments on the dates you have agreed to make them on. 

In most cases these payments are automatically deducted from an account you register with the school.

The payments are usually withdrawn from your account in the first week of every month. This means that once you have agreed to make the payments you have to ensure that the funds are available in your account on those dates.

If the college or the third party service managing the installments is unable to withdraw due to lack of funds, be warned that there might be penalties involved by either the third party, the college, or both.

However, if you manage your personal finances smartly this usually will not happen. 

Also, keep in mind that the first payment might be slightly bigger because it will contain the fee that the college is charging for the plan.

Most colleges also require that parents commit to the payment plan instead of the students, as most students that age are not earning enough to commit to the installments.

For those with bad credit history, good news - payments plans, unlike student loans, also don’t require a credit check!

The advantage of studying at community college

One thing I feel is necessary to discuss before we continue with our discussion is the many other advantages that community colleges offer besides payment plans. For example, most students and parents don’t realize how affordable community colleges are to start with. 

Did you know that the average tuition at a community college is as low as $3,440? Tuition at private colleges or universities on the other hand is $32,410 on average.

Here is a great article on free community colleges that you might want to go through.

On top of being affordable, community colleges also offer or assist in getting scholarships that further ease tuition and fee payments. This has made college a reality for many American students who would not otherwise be able to afford it.

There are of course many other advantages of going to a community college like they are easier to get into, smaller classes mean students interact with teachers more, better school-life balance than four-year university demands, etc.

Unmudl Tip 1: If you want to know how easy it is to get into community college then read this in-depth guide.

Unmudl Tip 2: This great article explains why 5.4 million Americans opt for community college because of the many benefits they offer.

Example of how a payment plan may work

As an example, let’s say you owe $4,000 after all financial aid has been deducted from your direct costs. To make the $4,000 payment more manageable you now want to spread it out over 10 months.

This will mean that you will now only have to pay 10 installments of $400 each. Depending on your budget, this could greatly make life easier for you and your parents. 

Example of payment plan vs typical student loan

Depending on what your actual payable tuition is, you will have to see what is more manageable to you. While student loans have low monthly installments you end up paying a lot more in total. 

If you can afford the installments on the payment plan, however, you can save on the total payment you make for college. In real life, you will have to take a call on your and/or your parent’s financial situation.

Pros and cons of tuition payment plans

Payment plans are usually a great idea but they are not without their downside. Let’s sum up the pros we have discussed so far and look at some cons of applying for a tuition payment plan.

Pros of using a tuition payment plan

• Installments make tuition more manageable. This means that students can look at going to a college that they would not normally have considered due to financial constraints
• Payments plans are flexible - you can apply for 12, 10, 8, or any other number of yearly installments. Do check with your community college though. Different colleges have different payment terms. Some colleges even offer multiple payment plans.
• Installment payment plans are cheaper than student loans. While monthly installments on student loans are very low as they are spread over 5 to 10 years, the fixed interest on them means that they add up to a much larger total payment at the end.
• The service fee for these plans is also very low, usually $50 to 100. They have been in rare cases known to go as high as $200 but that is still cheaper than the service fee banks charge for loans.
• You get a lot of mental peace from knowing you are paying now rather than owing banks the money later. The student loan debt crisis has been steadily worsening over the years in the U.S.
• You can also opt for a combination payment and student loan plan. For example, the monthly installment for your plan comes round to $1,000 and you can’t afford to pay more than $500. You can take out a student loan on the amount you can’t afford thereby saving interest on what you can pay now.

Cons of using a tuition payment plan

Even though tuition payment plans offer an affordable way to pay for tuition, they also come with a few possible drawbacks.

• As mentioned earlier, the college or the third-party service working with the college for your payment plan may charge fines if they are not able to collect monthly installments. For example, FACTS the tuition management company charges a fine of $30 if it is unable to collect payment due to insufficient funds.
• Tuition payment plans have a limited scope. As mentioned earlier, only the direct costs like tuition and fees are covered in those plans. They may or may not include boarding and lodging. They definitely do not include the cost of school supplies, transportation, personal expenses, etc.
• Some colleges don’t offer payment plans.

What if my school doesn’t have a payment plan?

If your school does not offer payment plans or even with the plan you still can’t afford the payments, then you still have multiple college payment options.

• FAFSA (Federal Aid): This encompasses grants, student loans, scholarships, and work-study. The financial aid you receive will vary from student to student. The school you apply to will determine how much aid you will receive.
• Scholarships and grants: Besides FAFSA, there are many state-level and private scholarships and grants that you could apply to. For example, there are many opportunities available for minorities.
• Private student loans: The last option you should consider. The fixed interest-based system has created nightmares for students. The student debt crisis, as mentioned earlier has worsened over the years. However, in certain cases, they are the only option available.

The Takeaway

More than 5.4 million students in the U.S. opt for community colleges because of the many benefits they offer. Even people who are already part of the workforce go to community college to change careers or advance in their existing careers by acquiring additional skills.

For these people and their families, tuition for college can be a difficult thing to manage. However, payment plans that most community colleges offer help a lot with this situation.

Our guide showed you how, instead of paying the full tuition upfront, you have the option to break it down into monthly installments for a fee. We hope that this guide has eased your tuition woes a bit. 

Unmudl Bonus: How to use community college to change or advance in your career.