CFPB Warns Families of Risks With College Tuition Payment Plans

Nearly 4 million students use college tuition payment plans each term, according to CFPB estimates. These plans allow families to pay tuition in installments.
While interest-free, payment plans can come with fees and families may struggle if they miss payments. Penalties include steep late fees, transcript withholding, and removal from classes.
Payment plans are marketed as alternatives to loans but pose similar risks if families fall behind on bills, per the CFPB. Students may not know who to contact with issues.
1 in 3 colleges can withhold transcripts to collect on unpaid payment plan bills. Plans may also be converted into private loans with bad terms if missed.
Before enrolling, carefully review payment plan terms and risks, experts advise. Make sure to understand all fees, penalties for missed payments, and who to contact.

Nearly 4 million students use college tuition payment plans each term, according to CFPB estimates. These plans allow families to pay tuition in installments.
While interest-free, payment plans can come with fees and families may struggle if they miss payments. Penalties include steep late fees, transcript withholding, and removal from classes.
Payment plans are marketed as alternatives to loans but pose similar risks if families fall behind on bills, per the CFPB. Students may not know who to contact with issues.
1 in 3 colleges can withhold transcripts to collect on unpaid payment plan bills. Plans may also be converted into private loans with bad terms if missed.
Before enrolling, carefully review payment plan terms and risks, experts advise. Make sure to understand all fees, penalties for missed payments, and who to contact.