Payment Plans—A Powerful Weapon in the Fight Against Student Debt

Identifying at-risk students and boosting student success

A recent survey found that 48% of students want to attend an affordable school and graduate with as little debt as possible. But almost 40% of those students are paying for school with student loans. What’s more, 7 out of 10 students and parents agree that payment plans have significantly increased their chances of graduating on time with less debt.

This web seminar focused on how payment plans can help reduce the loan debt burden on students, and reduce the workload for an institution’s business office.


Pamela Wilkes
Senior Solutions Engineer

Scott Salzman
University of Dallas

Pamela Wilkes: While a college degree has never been more important, it has also never been more expensive. Over the past three decades, tuition at public four-year colleges has more than doubled, even after adjusting for inflation.

Between 1992 and 2012, the average amount owed by a typical student loan borrower who graduated with a bachelor’s degree has more than doubled to nearly $27,000. The maximum Pell Grant covers only up to 30% of the cost of a four-year public college education, the lowest proportion in history, and that is less than half of what was covered in 1990. In-state tuition and fees at public four-year institutions have increased from $3,190 in 1987-88 to $9,970 in 2017-18. For every student who drops out for academic reasons, five drop out for financial reasons.

How can the business office support student success with a payment plan? Transact Cashnet conducted a survey, which had 1,567 respondents, including students (13%), students returning (25%), parents (58%) and others (5%). Seven of 10 payers agreed that payment plans have assisted them with their debt and have increased their chances of graduating.

Scott Salzman: We run three types of payment plans on a semester basis: three-, four- and five-installment note payment plans. Normally, in a fall-spring semester, we see anywhere from 600 to 700 students enroll in these plans. We’ve been with Cashnet since 2007, and we implemented our payment plans in 2007.

There are two important implementation decisions. First, you have to determine what to show on the payment plan. We show charges, Title IV aid, third-party scholarships, and AR memos, which are basically types of funding that do not go through the financial aid module, such as a 529.

The second critical decision is how you want the information presented on the payment plan. Do you want to have one line item called “charges” so you simply bring all the charges into one number? Do you break out tuition, fees, and room and board? Or do you want to do something in between?

A few quick tips about the internal plan:

  • You have to be willing to manage and monitor it. It’s not just something you set up and it runs on its own.
  • Plans should be examined to make sure that there are no abnormalities and that payments are evenly distributed.
  • Make sure autopay payment plans are monitored.
  • Compare the payment plan with your ERP to make sure that what’s coming across from the ERP is what you’re expecting to see in cash on the payment plan.
  • Source amount codes need to be updated every semester.
  • If payment plan charges and payments and financial aid do not match, always check your source amount codes.

Pamela Wilkes: In summary, payment plans are effective at supporting students’ success. Those who participated in payment plans have had a positive experience: 84% said they had an excellent or fair experience, and 73% said they were very likely to enroll in the payment plan again.

Market segmentation is important when promoting payment plans. We recommend educating freshmen about payment plans early in the process. And don’t forget to include parents and authorized payers in the conversation, as they will most likely help students make payments and reenroll in the payment plan.

To watch this web seminar in its entirety, please visit