Payment plans are good for students who wish to pay for their tuition balance but don't want to take out loans. But how do they work? Like many elements of financial aid, the answer varies based on the school.
The way a payment plan works is whatever amount of schooling you wish to pay for out of pocket, you may. Typically, any aid that you can receive that you will not owe back (such as grants and scholarships) is applied to your tuition first. If there is a remaining balance, then that is the amount you pay.
Many schools have a fee for using this service. These same schools will often use an office for you to pay or even allow electronic payments. At Metro Business College, we do not have any electronic service for this, but we will also not charge any fee for any payment made to the school while you are enrolled. Many schools will put you on a term-based payment schedule (such as make a payment every semester). We allow the flexibility to suit your needs by allowing you to have a weekly, biweekly, monthly, quarterly, or even the whole lump sum payment.
If your amount at Metro Business College hasn't been paid off by the time you graduate, then you will either have to take out a federal loan (if possible) or take out a Central Finance Loan. The Central Finance Loan is considered an institutional loan that you make arrangements for when you are in your last quarter. There is a 3.5% interest rate with this (which is less than the federal loan rates).
Some schools require these payments to be made in whole before you graduate. Remember to always check with your Financial Aid office to ask questions about a payment plan for you if you are interested. It may not always be possible for you to make payments, but after the grants and scholarships, self-payments are the best way of helping your financial future by avoiding unnecessary debt.