Unlike nearly every other bill your family pays, you may be surprised to learn that your student bill for college may never arrive in your mail box. In fact, if the college mails a bill, it will almost certainly be addressed to the student. In addition, the terms and conditions (refund policy) may not be fully disclosed or difficult to find.
Here is what college parents need to know. Last spring your student likely received an “Award Letter” that described the cost of college, scholarships and likely suggested an EFC – “Estimated Family Contribution”. Now the question comes – where does the cash come from to pay the EFC? The amount due to your college or university. Here are five tips for college parents who are preparing to pay their college bill:
- First, know when the school will send out the first tuition bill. Most schools will make this information available on their academic calendar, or check the Bursar’s Office or Student Accounting Office. (Hint: This is the office at the college or university responsible for the billing of student tuition accounts. It is separate from the Financial Aid Office, which determines student aid awards.)
- Determine if your school will send the tuition bill or if you will be required to log-in to a student financial account where you can see your bill displayed? Be aware, that most colleges and universities send the tuition bill directly to the student, not the parent. Also, most schools send the tuition bill electronically either via email or through their online student portal, rather than mailing the bill.
- Make a payment plan with your student about how the tuition bill is going to be paid. Will you take out a PLUS loan (Federal student loan) or Private Student Loan (often less expensive for parents with good credit, utilize a Tuition Payment Plan (installments) or even a credit card (where most schools charge a convenience fee of 2 – 5%).
- Give yourself time to pay your first and final payment. Normally the first bill is a deposit of a few hundred dollars. However, the final bill is likely to be thousands of dollars. If you are planning to use funds from a 529 plan be aware that it may take days and even weeks for the funds to be transferred which can impact your student’s ability to enroll in classes.
- Lastly – if you are investing thousands of dollars in your son or daughters college education, be sure to know what the college or universities refund policy is if your student is forced to withdraw. Be sure to ask your school if they provide 100% refunds (most schools do not) and if not ask about tuition insurance or consider purchasing tuition insurance prior to the start of classes.