Paying College Tuition: What Parents Need to Know

Paying tuition doesn't have to be complicated. Here are practical tips to make your first bill, and the ones coming after, as smooth as possible.

Payment Due Dates

For most colleges, tuition bills for the fall semester are due in August, and those for the spring semester are due in December. Keep in mind that deadlines vary by school, and some use rolling deadlines or different semester schedules.

Bills are typically issued a few weeks before the due date, giving time to arrange for payment. Tuition deadlines for your child's school should be readily available online (they want to get paid, right?) or by calling the bursar's office directly.

The bursar's office at colleges handles all student billing and payments, so this is a great

resource for payment questions. The financial aid office, on the other hand, handles all things related to grants, loans, and Free Application for Federal Student Aid (FAFSA), which means this office is another great resource for questions about student or parent aid.

Keep in mind that bursar and financial aid offices often provide information only directly to students or when a student is on the phone.

Structuring a Payment Strategy

Making tuition payments can be straightforward for some people and not as straightforward for others. For those parents who have one 529 plan for their child with enough funds to cover college – congrats!

For the parents who will be using a combination of 529s, loans, and cash flow to cover tuition bills, structuring some sort of payment plan, not just for the first tuition bill but for subsequent bills, should be a priority.

Start by totaling all resources available for college expenses over the next four years. Here is an example:

• 529 balance: $40,000
• Available federal student loans: $27,000
• Available cash flow: $10,000 x 4 years: $40,000
• Total resources over 4 years: $107,000

Next, divide total resources by eight (the number of semester payments over four years):

• $107,000 / 8 payments = $13,375 available per semester

This approach spreads your payments evenly, so you're not draining your resources in the first two years and scrambling to fund the last two. Now you can spot any gaps and plan accordingly. Your student might need a summer or on-campus job, or additional loans might be necessary. The key is planning ahead rather than scrambling.

Making Payments

Once you have your payment plan structured, the next step is to figure out how to actually make payments. Colleges often offer electronic payment options through student portals, making the process straightforward when using a single funding source, such as paying directly from your 529 account online.

However, if you are combining multiple funding sources (529, student loans, and cash, for example), the process is trickier. If student or parent loans are involved, the loan provider automatically disburses funds directly to colleges. Partial payments from 529s or checking accounts will be necessary to cover any gaps.

That said, schools handle this process differently, so contact the bursar's office to confirm how they accept combined payments from multiple sources. Pro-tip: Set a calendar reminder a few weeks before each payment is due, so you have time to coordinate funds from multiple sources.

529 Reimbursement Rules

Some parents elect to pay college bills directly out of checking accounts and then request reimbursement from their 529 accounts. This method is allowed, but it is very important to request reimbursement in the same calendar year the payment was made.

To protect yourself in case of a tax audit, keep detailed receipts and documentation of all college bills paid with cash that you later reimburse from your 529. Remember, only qualified education expenses (tuition, fees, room and board, books, and required equipment) are eligible for reimbursement.

Summary

Set yourself up for success by taking time upfront to map out billing due dates and a payment strategy. If combining multiple funding resources, get more information from the college regarding payment logistics. Be aware of 529 reimbursement rules! With a solid plan in place, you can focus on supporting your student through this exciting new chapter.

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