Georgia Tech Students Have New Option Paying for College
Board of Regents Approve Test that Could be Copied throughout University System
Atlanta — May 1, 2012
It’s a single sentence recently approved by the University System of Georgia Board of Regents, but its 29 words carry a big positive impact for students and parents looking at how to pay for college. The addition to existing board policy clears the way for a test program this fall at the Georgia Institute of Technology that will seem familiar to anyone who has ever paid for goods or services over time.
Tech’s pilot plan addresses a state law that prohibits state agencies from providing services before payment. Historically in the University System that has meant that full payment for tuition and fees was due when classes started since the state’s gratuity clause doesn’t allow the state to issue credit. That law can put some students in a financial bind and for some even derail college plans.
The regents’ action sets up a way to satisfy both the law and help students. The sentence that is the solution says “an institution filing an approved plan with the Office of Fiscal Affairs may elect to collect tuition and mandatory fees on an installment basis, in advance of services provided.”
Under the Tech plan, once a $75 dollar enrollment fee is paid, tuition and fee payments will be split into three installments, 50 percent prior to the first day of classes, 25 percent due a quarter into the term, and the final 25 percent due at the halfway point. Tech will administer the program.
“This means that services are paid for up front and then installment payments are accepted through the midpoint of the semester for the remaining balance,” said Georgia Tech Senior Vice President for Administration and Finance, Dr. Amir Rahnamay-Azar. “Thus we follow state law and give students and parents greater flexibility.”
System officials say the pilot program will serve as a model that, if successful, can be made available to all 35 USG institutions.
“We will monitor the Georgia Tech pilot for a year and work through any unforeseen issues,” said USG Vice Chancellor for Fiscal Affairs John Brown. “Once we are satisfied with the program, we will be able to offer it to other USG institutions.”
Tech’s research to develop its pilot program found that 70 percent of Georgia Tech’s public peer universities participate in installment plans with student participation rates of 10 to 40 percent. The Institute’s projections indicate that 10 to 15 percent of Tech’s student population will participate in the installment program.
“The payment plan program will serve our student population well,” said Rahnamay-Azar. “When you look at this new proposal, along with some of the other programs we already have in place, I can say that we are making great strides in maintaining affordability at Georgia Tech.”
The Tech pilot program joins a current program available to students by Nelnet, a financial services company based in Lincoln, Neb. The company specializes in education financial services and offers students a tuition installment option. Brown said that several USG institutions use Nelnet, which prepays tuition and fees on behalf of the student.
Major differences in the Tech plan and those provided by companies such as Nelnet are that students and parents deal directly with the institution instead of the third party provider and Tech requires 50 percent payment on the first day of classes versus Nelnet’s 60 percent. The Tech plan covers full tuition and mandatory fees while the third party provider sets a maximum limit on the amount covered.
Since the Georgia Tech program will be administered by the institution, Brown said that some USG institutions might have concerns about copying the Tech model. “Therefore, the third party provider option through a company like Nelnet will still be available to serve as an alternative for institutions that do not choose to manage an internal program,” he said.« News Releases