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August has arrived, and with it comes the inevitable fall payment deadline from your college.
In a perfect world, families would have a plan for paying for all eight (or more) semesters, not just the next one that's due, says Shannon Vasconcelos, a college finance consultant with advising service College Coach.
But the reality is that there are plenty of families who are making last-minute decisions about how they'll meet the deadline for paying off their students' fall tuition and room and board balances. In fact, online search trends over the past six years show that searches for "financial aid appeal" start climbing in July before peaking in mid-August.
So is it too late to ask your college for more money if you can't afford your bill?
Yes and no.
Colleges technically accept financial aid appeals year-round, but your chances of being successful are far slimmer now than they were in April. If you've experienced some change in financial circumstances or there's something you didn't originally share with the college—say, a job loss or high medical bills—you should certainly tell the college now.
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At this point, though, most colleges will probably deny the request even if you have a valid reason because they've already exhausted their financial aid for the year.
So if a successful appeal is unlikely, what options are left? These steps can help you pull together a plan.
Start by figuring out your gap and identifying why it exists. Was there some unforeseen circumstance between last spring and August that affected your income and cash flow? Was it simply poor financial planning? Knowing what you need to come up with and why you don't have it now will help you triage the options that are available to you. A family that needs to come up with $1,500 to pay for a more expensive residence hall and an extra course, for example, will have more options than a family that has to fill a $10,000 gap.
It's also important to find out when you absolutely have to pay the money by. Most colleges say that tuition bills are due during the first week of August, but late fees often won't kick in until the semester actually starts a month later, says Paula Bishop, who advises families on paying for college. Missing that August 1 due date may be an option for a family that has a temporary cash shortfall while waiting on a check. But you will need to ask what effect a late payment will have on the student's ability to register for classes.
Finally, if you read the options below, you'll pick up on a consistent tip: Ask your college's financial aid office. That is always a solid first step (and sometimes a necessary follow-up step), especially with the clock ticking on the due date.
Option 1: Borrow more money
Parents often tell Bishop they don't want their child borrowing money for college. But if you have a gap you need to fill, federal undergraduate student loans are a no-brainer. They're the cheapest loans available to students, with fixed interest rates at 3.76% this year. There's also a cap (between $5,500 and $7,500 annually depending on the year in school) to keep students from over borrowing, and they offer the most flexible repayment options.
Saint John’s University is a Catholic school for men that partners with a nearby women’s school, College of Saint Benedict, to share academic programs and campuses resources. Nearly 80% of students at Saint John’s graduate within six years, 12% higher than similar schools. FULL PROFILE Courtesy of St. John's UniversityRecently admitted CalTech students scored about 1600 on average on their SATs—higher than at MIT or Stanford. Professors are notoriously hard graders. The school boasts 34 Nobel laureates among alumni and faculty. Recent grads tend to get high-paying jobs. FULL PROFILE Courtesy of California Institute of TechnologyPomona is among the handful of schools vowing to meet student’s full demonstrated need with aid, so more than 70% of grads have no student debt. With 1,600 undergraduates, Pomona features close student-faculty relationships. FULL PROFILE Courtesy of Ponoma CollegeIllinois’s flagship university is among the top 15 public schools on the National Science Foundation’s list of high research spenders, and its strongest programs include accounting, engineering, and physics. Students also have access to the country’s second largest university library system. (Only Harvard’s is larger.) FULL PROFILE Courtesy University of IllinoisClemson was founded as an agricultural college, and while agricultural science is still a specialty, more general programs such as business are more popular today. Most every one at this rural campus is united by an enormous amount of school pride, especially around the football team. FULL PROFILE Courtesy of Clemson UniversityUCLA produces a lot of stars: professors like Internet pioneer Leonard Kleinrock, grads in show business like Ben Stiller, and others in pro sports like Kareem Abdul Jabbar. The school also supports ordinary students as well, with more than one third from low-income families. FULL PROFILE Courtesy of UCLALike most large public schools, the University of Maryland has some all-star professors. The faculty roster boasts three Nobel laureates, two Pulitzer Prize winners and, thanks to the campus’s proximity to Washington, D.C., leaders in major positions at federal agencies like NASA and the National Institutes of Health. FULL PROFILE Courtesy of University of MarylandWhile Virginia Tech is known especially for engineering, its business, social sciences, and agriculture programs are also strong. The campus Math Emporium houses hundreds of computers programmed with lessons that have boosted students’ math prowess. FULL PROFILE Courtesy of Virginia PolytechnicUC–Davis has made a reputation as an affordable school that produces results. About 43% of students are low-income, but its six-year graduation rate is a high 83%. The school is best known for its agriculture and animal science specialties. FULL PROFILE Courtesy of University of CaliforniaUC-Irvine shines in serving one of the most diverse student bodies in the country: More than 40% of students come from low-income families. Yet the school still boasts an 86% graduation rate—an impressive 41% higher than similar colleges. FULL PROFILE Courtesy of University of CaliforniaThe University of Florida is one of the biggest bargains in higher education, with tuition of just $6,300 a year for Floridians. For that low price, students get access to some of the world’s top professors, well-respected programs in fields as diverse as astronomy and journalism, and sports teams that often dominate their leagues. FULL PROFILE Courtesy of University of FloridaUC-San Diego is one of the top research universities in the country, with renowned science programs, especially in marine biology and oceanography. Like other colleges in the University of California system, the San Diego campus stands out for its comparative affordability for state residents. FULL PROFILE Courtesy of University of CalifoTexas A&M has one of the largest undergraduate student bodies in the country, with more the 40,000 students who graduate into an especially proud, loyal group of alumni. The college is well known for its business, agriculture, and engineering programs, as well as a recreation, park, and tourism management program. FULL PROFILE Courtesy of Texas A&MLike its fellow high-ranking Ivy League peers, Princeton and Harvard, Yale is highly selective. But for students who are admitted, the college promises a very generous financial aid package and courses taught by some of the world’s most extraordinary academics. FULL PROFILE Courtesy of Yale UniversityMIT is one of the best known and most respected science colleges in the world. It’s competitive selection process and grueling course load produces results, though—recent graduates boast one of the highest average salaries in Money’s rankings, according to PayScale data. FULL PROFILE Courtesy of MITStanford isn’t one of the eight members of the elite Ivy League, but it would fit right in. It’s the hardest school in the country to get into and has generous financial aid policies like Princeton and Harvard. But here’s a key difference: Recent graduates report average annual salaries that are $8,000 higher than those of Ivy League grads. FULL PROFILE Getty ImagesUVA boasts the highest graduation rate of any public university in the country, at 93%. The university’s academic strengths are wide-ranging, and the campus is the only U.S. college to be designated a UNESCO World Heritage Site, thanks its connection to founder Thomas Jefferson. FULL PROFILE Courtesy of University of VirginCooper Union is unique—a small, urban school that offers degrees only in art, architecture, and engineering. Though Cooper Union no longer has the free tuition policy it was founded with, it’s still much more affordable than other elite private colleges. FULL PROFILE Courtesy of Cooper UnionAn elite liberal arts college, Amherst is one of a small group of schools that will meet 100% of the demonstrated financial need of students. As a result, more than two-thirds of its students graduate without taking out loans. FULL PROFILE Courtesy of Amherst CollegeUC-Berkeley, or Cal for short, ranks the highest of eight University of California system schools that made Money’s rankings. In fact, Cal is one of the most selective public colleges in the country. More than 90% of freshmen graduate within six years, a rate well above even other elite public universities. FULL PROFILE Getty ImagesBYU-Provo is the main campus of a private college system specializing in educating members of the Church of Latter Day Saints. Non-Mormons can attend, but are charged more tuition and must obey the school’s strict code of conduct. The university has a high graduation rate at an affordable price for a private education. FULL PROFILE Courtesy of Brigham Young UniversityThe typical Rice student majors in engineering, economics, or biology, and the university is also well known in the field of political science. Graduates of the selective private school fare well in the workforce: Recent grads out-earn their peers from similar schools by 16%, according to salary data from Payscale.com. FULL PROFILE Courtesy of Rice UniversityHarvard may be the most recognizable college in the world, and it’s practically synonymous with the prestigious Ivy League. Like many of its peers, Harvard excels in Money’s rankings not only because of the outstanding education it provides but also thanks to its generous financial aid program. FULL PROFILE Getty ImagesThe University of Michigan accepts less than a third of the nearly 50,000 students who apply, and is nearly as popular with out-of-staters as with Michiganders. State residents who get in enjoy an especially good deal: Michigan is one of 11 colleges in Money’s top 50 where the average in-state cost of a degree is less than $100,000. FULL PROFILE Dave Lauridsen for MoneyPrinceton University's generous financial aid makes it, according to Money’s analysis, the most affordable member of the Ivy League. The school gives out such large grants to the six in 10 families who qualify (families earning less than $250,000 generally get some aid) that more than 83% of students graduate without any debt. FULL PROFILE Courtesy of Princeton University
If you or your child already took the maximum in federal student loans, a federal direct PLUS loan, which allows parents to borrow up to the entire cost of attendance, is your next best option. Parents can apply at Studentloans.gov, and the application process takes less than 10 minutes, says Vasconcelos, who previously worked as a financial aid officer at Boston and Tufts universities. Even if you turned down federal loans last spring or took out less than you were offered, you can still re-apply for more.
Federal undergraduate student loans or PLUS loans are also best for those in a time crunch. Colleges usually receive notification of approval within a day, Vasconcelos says.
Families could shop around for a private education loan, but they involve more extensive credit checks, and it can take a few weeks for loans to be completely approved. What's more, only families with the best credit backgrounds with get rates that compete with the federal government's 6.4% interest rate.
Note that the federal government splits loan awards between two semesters, so if you're looking to cover an $8,000 tab for the fall, you need to borrow $16,000. For parent loans, you also need to factor in a 4.27% origination fee, Vasconcelos says. So, again, if you need exactly $8,000 for the semester, you need to borrow $16,715, of which $713.75 would be taken out in fees. You can talk with the financial aid office to figure out the exact amount you need to borrow to meet you balance due.
A word of warning: Just because you can borrow up to the total cost of attendance doesn't mean you should. You need to consider college expenses on a four-year horizon. Monthly payments on a one-time $10,000 loan for the fall may seem manageable. But multiply that by eight semesters, and you're looking at an $80,000 debt, with monthly payments that will top $900 a month.
In other words, "if you're struggling to come up with one semester's payment, how are you going to come up with another seven?" Vasconcelos asks.
Option 2: Sign up for an installment plan
At least 80% of four-year colleges offer a tuition payment plan, according to the data they report to Peterson's. Colleges that offer longer plans, with 10- or 12-month payment periods, may have start dates in the summer, meaning you already should have signed up and started paying. You can probably sign up for the plan late, but you should be prepared to make a month or two of catch-up payments immediately. Other colleges, such as the University of Akron, have a four-part installment plan that starts in August, and you can still sign up for it. Note that payment plans are generally interest-free, but they carry a small sign-up fee (usually less than $100).
Option 3: Ask about special programs, such as emergency aid or targeted scholarships
Growing numbers of colleges are starting emergency or micro grant programs to help students overcome relatively small financial barriers. Many of these programs are promoted by word of mouth; a faculty member or financial aid office staffer may recommend a student they know is struggling financially. Still, it can't hurt to contact the financial aid office and ask if you would qualify.
Be aware that these dollars are limited and are usually targeted to specific types of students, often those who are nearing graduation. At the University of Akron, for example, the Retention and Completion Initiative was designed to help students in danger of dropping out. Since the program started in 2013, the university, with 21,000 undergraduates, has awarded $415,000 to 406 students, for an average award of just over $1,000.
This year, the university is also starting the Akron Attainment Award, a grant program that's designed to fill the funding gap for students who've exhausted other scholarship and loan programs and whose parents don't qualify for federal loans. So far the university has identified five eligible students for the fall semester, says Jennifer Harpham, director of student financial aid.
For those students, a parental contribution really isn't possible, but for most middle-income families, Harpham says families have to assume that the student will need some kind of parent help.
