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Not every student can afford to pay their tuition as a lump sum, so why not offer payment plans? Well, payment plans can have positive and negative effects on the school; thus, we encourage you to weigh the pros and cons before making that choice.
As with any financial decision, it's important to consider the risks associated with offering a payment plan and how it will impact your students.
A payment plan can make it easier for prospective students who need more time to pay for their education, which can lead to more applications and admissions.
Of course, if a payment plan increases the number of applications your school accepts, you'll likely see an increase in revenue from tuition fees paid by those new students.
You can use payment plans to attract new students, especially those who are working.
It will help students who may be struggling but still want to complete their studies.
This will give students a positive experience with your school, leading to great reviews and a higher chance of being recommended to other potential students.
If your school has a high percentage of students who are unlikely to pay their tuition in full, it may not be worth your time and effort to set up a payment plan.
If students only need to pay a deposit, they might not take the class and withdraw before the start of the class or midway. Students who pay in full are more dedicated to attending and finishing their courses.
If your class only accepts a certain number of students, it would be a waste of time and resources if the students withdraw because they’re not that interested or realize they couldn’t afford it. Once this happens, you’ll have to find replacements for those students to use a class.
You can't plan for the future if you don't know how much money you will have. One of the most important factors to maintain a stable financial situation is predictability. It's best to have a predicted income with a reasonable degree of accuracy so that you can plan for expenses and ensure that you have enough money on hand to cover them. This is still possible while offering payment plans but it will lower the accuracy.
Those are the possible outcomes of offering payment plans. You should now understand the benefits and risks to judge if offering payment plans is worth it for your school.
Here’s a great tool that will assist you with accepting tuition fees, whether in full or payment plans, all the while increasing enrollment.
Our all-in-one free school portal allows you to run your whole school. Accept robust online registration, collect payments, manage payment plans, store enrollments, and manage all classes and programs.
