3 minute read

Helping Gen Z Minimize Debt with Payment Plans

4/19/2022 7:00 PM

It appears that Gen Z is more averse to taking on debt than previous generations and actively seeks alternatives to student loans. And since, as a group, they experienced the highest overall debt growth in 2019 and 2020, with an average increase of 67%, Gen Z’s reluctance to take on debt may only increase. This could lead to lower enrollment rates overall and lower credit loads to manage costs for those that stay enrolled, slowing their progress toward a degree.

To help students stay enrolled and avoid debt at the same time, colleges and universities can offer tailored payment plans. Transparent, integrated tuition payment plans help students stay on top of their financial responsibilities while continuing to make progress towards their education goals. Offering payment options helps institutions meet student needs, streamline payment and account activity, and communicate with students regularly.

Transform a Big Bill into Manageable Payments

When faced with an entire semester’s tuition due all at once, taking out an interest-bearing loan to make the payment can be a daunting option. But payment plans can help students minimize and possibly avoid accruing debt by managing the size and timing of tuition payments.

Instead of paying all of a semester’s tuition at once, payment plans give students the ability to pay in installments. The scheduling of payment installments helps students—and their parents and sponsors—plan ahead and budget ways to make tuition payments on time and in full, while still attending to other fiscal obligations.

Flexible to Fit Needs

Administrators can create, manage, and enroll students in installment plans that fit the needs of students and the institution. Staff can set up payment schedules, charge service and late fees, send automated reminders and notifications, and more. Payment plan solutions also integrate with student information systems, sharing payment and account status with other departments that need to know this information, like the registrar’s office.

Payment plans are flexible, to the benefit of students and institutions. If emergencies and special circumstances happen, administrators can waive fees, offer extensions, and make other adjustments as needed. Students, parents, and authorized users can actively manage their account through a self-service portal. The portal promotes awareness and transparency of due dates and policies, provides access to tools for managing payments, and enables direct communication with administrators about account and payment plan processes and details.

Payment plan solutions allow administrators to view reports and take advantage of the data analysis to spot payment trends and process problems, and react with improved plan designs, policies, and procedures. If a student or authorized user encounters an issue with their account, administrators can immediately access and track down what has or has not happened in the account. With accurate and up-to-date information, you can problem-solve with less complications and clearly communicate the resolution process.

A Solution for Both Sides of the Equation

Payment plans are an opportunity to provide what students and institutions want. Debt-averse students can pay for higher education without taking out loans or stopping enrollment; colleges and universities can maintain enrollment and stabilize revenue streams. Rather than face an all or nothing situation, students and institutions create a middle path that satisfies both of their needs.