Payment schedule/plan for private school

[Anonymous]

DD just accepted and we are wondering about the payment schedule - pay once (May) in full, pay in 2 installments (May + Jan) or 10 monthly installments (May-Feb). We are not super wealthy. What schedule would you choose or what do most people do?

[Anonymous]

whatever works best for your budget and cash flow.

[Anonymous]

Most people at the two private schools I’ve been to do monthly payments, even the ones who are wealthy. We used to pay by the semester until COVID but since then we do monthly and have tuition insurance. This allows me to bail if we need to without the school already having my money in advance. I will not ever pay tuition for long term virtual learning. I learned the hard way.

[Anonymous]

Don’t worry about what most people do. Do what works for you. Check whether there are any fees or discounts involved — for example, DC’s school offers a $400 discount for paying in full (peanuts compared to the $54k cost, and not worth it to us for the difficulty it would cause to get the whole thing together at once) and charges an admin fee for the 10-month plan (I forget how much — not a huge amount, but since we *can* get 1/2 tuition together at once, again, not worth it *to us*, but may be a necessary cost for some). So we pay in two installments, which gives neither a benefit nor a penalty, but is what is manageable for our annual cash flow situation.

[Anonymous]

we do the monthly payments.

[Anonymous]

Anonymous wrote:DD just accepted and we are wondering about the payment schedule - pay once (May) in full, pay in 2 installments (May + Jan) or 10 monthly installments (May-Feb). We are not super wealthy. What schedule would you choose or what do most people do?

Why would you ask this question here? If paying all at once is even an option than you’re wealthy enough.

[Anonymous]

Anonymous wrote:Most people at the two private schools I’ve been to do monthly payments, even the ones who are wealthy. We used to pay by the semester until COVID but since then we do monthly and have tuition insurance. This allows me to bail if we need to without the school already having my money in advance. I will not ever pay tuition for long term virtual learning. I learned the hard way.

How do you know? I don’t even know the payment plan of even one other family at DC’s schools. At most, I could see having that discussion with one or two families we are particularly close to, but in our case, finances are never a topic of discussion. How can you speak for most families at multiple schools?

[Anonymous]

We do monthly and are “wealthy”.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Most people at the two private schools I’ve been to do monthly payments, even the ones who are wealthy. We used to pay by the semester until COVID but since then we do monthly and have tuition insurance. This allows me to bail if we need to without the school already having my money in advance. I will not ever pay tuition for long term virtual learning. I learned the hard way.

How do you know? I don’t even know the payment plan of even one other family at DC’s schools. At most, I could see having that discussion with one or two families we are particularly close to, but in our case, finances are never a topic of discussion. How can you speak for most families at multiple schools?

I was on the Board at both schools and this was discussed by our Chair of Finance. They didn’t give names - just percentages, which hovered around 85sh percent at both schools.

[Anonymous]

We do 2 installments. Didn’t realize so many do monthly.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Most people at the two private schools I’ve been to do monthly payments, even the ones who are wealthy. We used to pay by the semester until COVID but since then we do monthly and have tuition insurance. This allows me to bail if we need to without the school already having my money in advance. I will not ever pay tuition for long term virtual learning. I learned the hard way.

How do you know? I don’t even know the payment plan of even one other family at DC’s schools. At most, I could see having that discussion with one or two families we are particularly close to, but in our case, finances are never a topic of discussion. How can you speak for most families at multiple schools?

I was on the Board at both schools and this was discussed by our Chair of Finance. They didn’t give names - just percentages, which hovered around 85sh percent at both schools.

Interesting! I’d have assumed 2 installments was most popular. Did either school have incentives or penalties for any payment plans?

[Anonymous]

We do the monthly plan. The school doesnt offer any price difference with paying upfront.
Agree about PP comment about covid. We paid preschool upfront, got no money back and most of the other families paid by month and they just stopped paying.

[Anonymous]

Our school has a fairly high finance fee for monthly (1-2%), but its still lower than just keeping the money in a HYSA, so the combination of that plus greater flexibility makes monthly a no-brainer.

[Anonymous]

Are there different payment terms for your plans?

I was just running the numbers on this too. Our school offers a 1% discount for the 1x pay option. The 2x and 10x options a) don't have the 1% discount and b) include a $150 "tuition management fee" for administering autopay I suppose. So that's something like $560 more to not do the 1x pay option. If tuition is $40K the average balance over the course of a year would be half that and $20K earning 3.25% = $650. Pay income tax on that and you're netting like $470.

Long story short, paying once for us is less expensive and simpler. If your tuition setup doesn't include a discount or fees then paying monthly makes sense.

[Anonymous]

We do monthly as we pay it out of our annual income. Even if we had it in savings or stocks, we’d probably want the money to work to our benefit as long as possible. If someone else was paying it, might be easier to just do the one chunk.