Paying For Tuition Out of Pocket

I was once faced with the decision of paying for tuition out of pocket or applying for a loan from a financial institution. The university that I wanted to attend gave me the option to pay my tuition per course (payment plan) or pay the full tuition fee.

To pay the full tuition fee, I would have had to apply for a student loan. But to be honest, the student loan was not appealing at that time, because I believed that I could make the payments on my own. To make the final decision, I contacted several lending institutions to see what types of loans were being offered, so that I could compare the two options.

Before I even started, I knew that paying for tuition out of pocket was the route for me. I did not want the hassle of a minimum five year loan when I knew that I could create my own loan scheme and get the same effect.

Plus, at that time I did not have many financial commitments and I could have handled the self-imposed loan quite easily. Each course in the programme was three months and I created a plan where I would save a little more than was needed to pay for each course.

Let’s say that the cost of the programme was USD $10,000 and it was estimated to take 24 months to complete. Each month I set aside $550 and when the course fee was due, I was able to pay it without hesitation.

Going this route required a high level of discipline, but I am a very determined person and I was able to make it work. Also, the alternative of missing a “payment” meant that it would be extremely difficult to find additional funds to cover it.

Advantages of Paying For Tuition Out of Pocket

1. Payment plans

You can take advantage of the university’s tuition payment plan and spread your payments over the life of your studies.

2. No debt

Because you were paying for your tuition whilst you studied, you do not have a student loan looming over your head at the end and you will be

3. Tax benefits

Depending on where you live, you might be eligible for tax deductions or tax credits based on the tuition that you have paid out of pocket.

4. No interest

Paying for school out of pocket means that you do not have to worry about interest on payments

Disadvantages of Paying for Tuition Out of Pocket

If you’re working overtime or moving from part time to full time employment to pay for your studies out of your pocket, it could take a toll on different aspects of your life. Working and studying is not easy and if you can not manage your time effectively, you will suffer in more ways than one.

1. Non-existent social life

Most of your time will be spent juggling school and work, so be prepared to pass on some of your favourite extra-curricular activities.

2. Harder to obtain and maintain good grades

Like I mentioned earlier, it’s difficult to work and study. Unlike full-time students, you can’t spend days in the library cranking out some extra study time.

3. Work performance might suffer

It might be difficult to maintain your work standards with readings, assignments and examinations on your mind.

4. Less sleep

Instead of your usual eight hour beauty sleep, you might find yourself taking a four hour nap, just so that you can get some studying done in the hours that you are not working.

Wait! Before You Start Paying For Tuition Out of Pocket…

Looking back at my decision to pay for my tuition out of pocket, I believe that I could have done a couple things differently that could have saved me more money. Of course deciding against the student loan was an excellent decision and I’m grateful that I had the foresight to crunch the numbers, assess the payback period and monthly payment of the loan and determine what my approach should be.

1. Look for Scholarships

My first big mistake was that I did not look for any scholarships. This was probably the biggest mistake that I made because I missed a perfect opportunity to possibly reduce my tuition fee. I will admit that there are not that many online scholarships and there is fierce competition for the ones that exist. Scholarships are usually merit-based, so your academics and extra-curricular background  should be very strong.

You should start looking for scholarships when you start looking at prospective universities, because there are specific application deadlines and requirements that applicants have to meet. Scholarships are offered by many different types of entities including academic institutions, governments and academic interest associations. Scholarship websites that I have used to search for scholarships are Scholarships for Development, Jobs.ac.uk and Find A PhD.

2. Apply for Grants

Another big mistake was that I did not look for any grants. Grants are needs based awards and although they might not be as large as some scholarships, they can be financially beneficial. Additionally, grants do not have many of the stipulations that are attached to scholarships and thus competition is very stiff. Similarly to scholarships, you should begin researching available grants when you are identifying universities.

Grants are offered by many different types of entities including governments, organisations, academic institutions, private groups, special interest organisations and region specific organisations. Grants websites that I used to search for grants are Scholarships for Development and Grants 4 Schools.

3. Think About Future Studies

This was one of the harshest mistakes that I made when I was looking for a university to pursue masters level studies. At that time I was of the opinion that I would not be pursuing any additional studies and selected a university that offered degrees up to the masters level only.

However, since then my views have changed and I am considering doctoral studies. Some universities offer useful discounts to alumni who continue their studies! When you are selecting a university, check to see if it offers discounts, grants or scholarships for past students just in case you decide to further your studies in he future.

Please don’t hide your money under the bed. That’s one of the first places that thieves check, if they break into your home.

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