At The Core is excited to be sharing a new blog post from Malea Hornback, CFP®, of Wealth Planning Corporation to help families read and understand their child’s college bill. Located in Cincinnati, Wealth Planning Corporation has been a private, independent wealth management company since 1984. WPC is a fee-only SEC Registered Investment Advisor, avoiding the outside conflicts of interest created by commissions, and providing full disclosure of fees for advice and services. Their client-focused company empowers families to make informed decisions in all financial matters—with a special focus on helping families with college-bound children save and plan for both college and retirement. Visit their website for their latest educational programming. You can read more about Malea below.
Reading and Understanding Your College Bill
Avoiding Late Fees, Duplication of Health Insurance Premiums & Interest Charges
Just as you carefully review your credit card statements, you should look through your student’s college billing statement line by line. Reviewing your student’s college bill for both understanding and errors is vitally important!
Students need to check their email
One thing to note, most schools now send only email notifications to the student. (Due to privacy concerns, parents need to be given access to their child’s account. It is important for parents to setup a portal in order to receive information. Not all colleges will notify parents via email so students need to keep parents in the loop.) Students will receive an email letting them know that their college bill is “now available.” This is a very important email, take note especially of the payment due date. This email is usually received in July and December (roughly 4 weeks before due). DO NOT MISS IT!
Mark your calendars with the due date which is usually a month before classes start.
Do not delay lining up your funds to make a timely payment, so that you avoid late fees on overdue balances. Each family will have different modes of payments and may be a combination of a few. Formulate your payment process remembering to allow room for check clearance or loan processing. Colleges don’t really care how you pay, as long as you pay on time!
What are your options for payment?
Colleges may have their own process, but different methods for payment include:
- Make sure funds are available -no returned check fees
- Double check the address if mailing and write your student ID# in the memo line
- Sometimes check payment will be virtual–parents provide routing and account numbers online to the college
- Payment Plan
- Be aware that additional service charges may apply
- 529 Withdrawals
- Understand the process and allow enough time for the funds to be distributed (2 weeks)
- Student Loans or Private Loans
- Allow time for processing and posting to the account
- Credit Card (last resort)
- Know that associated convenience fees will be applied (range from 2 to 3%)
Reminder: If you receive financial aid, be sure to file your FAFSA on time each year and check with your college financial aid office to guarantee your application is in good order. The FAFSA needs to be completed each year and the sooner the better. As soon as the FAFSA opens in October make it a priority to finish it by month end.
Carefully review all the fees on the college bill.
As you review the billing statement, become familiar with the list of charges and pending credits. One item to especially take note of is the Health Care Insurance Premium. In most cases, your student will be covered under your insurance plan, therefore you can waive the healthcare insurance offered by the college. Understand how to complete the waiver process keeping in mind the deadline. If you miss the deadline, you are locked into paying the health insurance premium (possibly $2,600+) and your student will be covered by a different healthcare plan.
Review and verify for accuracy the entire list of charges such as your tuition, housing and meal plan, lab fees, student center usage fee, specific program fees, graduation fees, transportation fee, recreation center fee. If you do not understand why a fee is included, be sure to call the bursar or financial office for clarity.
Each school is different, but there will be a lengthy list of charges. They are part of the cost of attendance but strive to understand what services you are paying for. Now you know what you are paying for and you can encourage your student to use those facilities, ride the bus or use the student center printing services…Not take an Uber to class, print at Kinko’s or join a gym. All these additional costs can add up, take full advantage of what is covered in your paid fees.
Also, review the pending scholarships, grants, and loans listed. When these are paid you will see them reflected as credits. If something does not match your award letter or you do not see the money posted, contact the office of financial aid. One item to note, work study will not appear on your bill as pending aid. This needs to be earned, saved and spent according to your plan.
After payment is made and pending funds received, log in one last time at the start of each semester to verify the balance due reflects $0.00. If you have an unpaid balance, you will incur late fees and service charges which adds to your total cost!
Note that a “CR” reflects a credit, and you should not pay a credit balance. If you have an overpayment, a refund can be requested.
How does the refund process work?
Another important process to fully understand is the Standard Refund and Withdrawal Schedule for your college courses. The process is different from college to college. Typically, there is a grid with date deadlines for class withdrawal and refund percentages. Let’s hope this is not anyone’s situation, but you never know. Again, take the time to mark your calendar one week before the drop dates so you have time to check in with your student if they are considering dropping a class.
Obviously, the earlier you drop a class, the more refund, but be aware of these important dates (not only for GPA sake, but for your wallet). Don’t miss a 30 or 50% refund for a class that your student is not going to complete! Do your part …check in with your student in the first 3 to 4 weeks of the semester. If a class is definitely not going to work out, take the necessary steps to drop in a timely manner to recoup some portion of the tuition paid.
Most universities will require students to setup direct deposit for refunds in their student portal. This is the fastest, safest, and most secure method. If you do not have the direct deposit setup, refunds in the way of checks can take weeks to be processed and mailed. When the refund is posted, an email notification will be sent.
If you paid for tuition, room and board, or other qualified expenses with 529 funds and receive a refund, please be aware it is a good idea to re-contribute that money BACK into your 529 plan. If you keep the refund, the IRS may consider it a non-qualified withdrawal from the 529, and it could be subject to a 10% penalty on the earnings. Check with your plan administrator for instructions on how to do this.
One last general note, search Facebook for parent only message boards for the specific college and join them. They can be a great source of information for meal plans, off-campus housing options, and other cost savings ideas.
In summary, taking a few minutes to review the college bill, waiving the insurance coverage (if not needed), planning out your payments, and verifying everything is balanced to $0.00 by the due date could save you hundreds. College is expensive enough, don’t get caught paying any more than is necessary!
Malea Hornback, CFP® is an Associate Advisor with WPC. Malea is a 1992 graduate of Miami University and is married with three sons. Since 1995, Malea has worked in the financial services industry building client relationships through financial planning and high-touch service. She feels giving back to the community is important, so she serves on various high school committees, volunteers locally and is involved with Miami University’s Women’s Giving Circle.
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