Those looking to enroll in your programs aren’t one-size-fits-all, so your available payment options shouldn’t be either. Understanding your students and their needs is key to knowing which are the best financing options for them — and having a diverse array of payment methods opens the door to more learners and increased enrollment in your courses. Below, we’ve outlined how you can address the various financial situations of prospective students to make sure your programs are accessible to as many as possible.
If they can make the highest upfront payment
If your student has enough money saved up to cover the program tuition and supplies, as well as living expenses such as rent and groceries, we would suggest they make the full tuition payment — while this option does have the highest upfront cost, they won’t owe any money in interest, and they won’t have to worry about making monthly payments. And in your case, your school will get the full tuition payment right away and won’t have to worry about missed or late payments in the future!
If they need to break up payments, but don’t want to pay interest
Many students, though, will be unable to make the financial commitment of full upfront payments. For these students, it can be beneficial to provide options to break up tuition into smaller amounts. Schools can manage these plans in-house, or they can use a third party to manage payments. For example, Climb offers two no-interest, no-fee payment options that schools can provide their learners:
Pay-as-you-go is Climb’s 0% interest, non-loan option for students. With this plan, students won’t owe any interest or fees, and since this option does not involve a credit check, their credit won’t be impacted. However, this plan spreads payments out over the shortest time period, so it also comes with the highest monthly payments.
Pathway Payments 0% interest loan
For those who need to break up payments into smaller amounts, Climb also offers a 0% interest, no-fee loan option. Pathway Payments are spread out over a longer period of time than Pay-as-you-go, so students’ monthly payments are lower. With this loan, though, a hard credit pull is performed, so their credit score may be impacted.
If they would rather make the smallest payments, even if they have to pay interest
For some learners, payments need to be broken up into even smaller amounts. In this case, they might prefer to pay interest so as to spread payments out as long as possible.
Private student loans like a Climb loan do come with fixed interest rates, so students will ultimately pay more than the total tuition. However, since it’s spread out over a much longer period, monthly payment amounts are much lower, which makes it a good option for those who need the smallest payment amounts possible in order to cover living expenses. For Climb loans, we offer the options of full deferral, interest-only deferral, or immediate full repayment, depending on what works best for your school and your students.
Additionally, Climb only performs a hard credit pull once funds are sent, so your learners can submit multiple applications to compare terms with no impact to their credit score!
Income Share Agreements (ISAs)
For students who are worried about finding a job post-program, ISAs are another option. With an ISA, your learners won’t have to make any tuition payments until they find a job and earn above a minimum income threshold. Once they’re earning a minimum salary amount, they’ll make payments based on a fixed percentage of their income, until they pay a maximum amount or number of payments.
One thing to keep in mind, though, is that the amount they pay will increase as their income increases. So while a student may not make enough to pay back the full tuition, if they do find a well-paying job, they may actually end up paying much more.