Payment plan tuition costs are going up, and paying tuition in one lump sum can place an undue financial burden on families. According to How America Pays for College 2015, a study by Sallie Mae and market research company Ipsos, families spent $24,164 on average for college in the 2014-2015 academic year (including tuition, room and board and transportation)—a 16 percent increase from the previous year. And while 89 percent of parents believe that college is an investment in their child’s future, less than half (48 percent) of families are saving for college, and they are saving less than last year.
Tuition payment plans can ease the financial burden by giving students and families the ability to make manageable payments over time and the flexibility to choose the plan and monthly payment amount that is most affordable for their budget. Tuition payment plans also offer students an alternative to traditional student loans, which can often carry high interest rates.
Here are some of the best practices our payment plan clients have put in place to increase awareness and adoption of tuition payment plans on campus.
- Break down the value of your payment plan quantitatively. Giving your students a simple example of how much they can save in the long run with a payment plan vs. taking out a loan will help shift their focus from how much they have right now to the “big picture” of their financial future.
- Identify the right channels of communication. List all the various touchpoints your office has with the student and think about where it makes sense to provide information. For example, we’re seeing schools introduce payment plans at orientation—a time when both the student and parents can receive the information, discuss the options and possibly make a decision.
- Offer flexibility within your plans. We have noticed with our clients that the schools with the highest adoption rates are those that offer increased flexibility within each plan, as well as those that offer multiple plans throughout the school year. Assess what you’re currently doing and identify whether there is room to add more flexibility.
- Take advantage of free educational materials. There’s no need to reinvent the wheel. Your service provider designs materials and should provide you with a strategy to help drive awareness of plans across your campus. For example, 10 schools that leveraged Cashnet’s resources for the first time in 2014 saw a 54% average increase in payment plan adoption compared to the year before!
- Go mobile! Meet your students where they are—on their mobile devices. Test new technologies and channels to notify them of your offerings.
To learn more about how payment plans can help your students, contact us today!