AMERICUS -- Georgia college students and their parents could be allowed to pay tuition and mandatory fees in installments under a plan the state Board of Regents approved Wednesday.
The regents already allow students to work with a private company that offers this service, though it hasn't been used widely. But the board gave Georgia Tech permission to pilot an in-house program starting this fall.
If the one-year effort succeeds, other colleges in the University System of Georgia will be able to offer the same service in-house, said John Brown, vice chancellor for fiscal affairs.
Currently students and families must pay tuition and fees by registration. Tech's program will require students to pay half by the first day of class. The rest would be due in two installments by mid-semester.
Using installments won't lower costs for students and families. Tech plans to charge $75 a semester to cover the costs of maintaining the program. But it will make payments more manageable, President Bud Peterson said.
"We understand students and families are facing challenges, especially in today's economy," Peterson said. "We are doing everything we can to assist them."
The regents' action on Tech's plan comes a day after they raised tuition, which will increase between 2.5 percent and 6 percent -- or $31 to $218 a semester -- depending on the college. Tech students will have the largest increase and the biggest bill.
The regents also chose not to eliminate a mandatory fee that costs students $160 to $544 per semester, depending on the school. The charge was set to expire at the end of June, but Brown said the system can't afford to lose the $210 million the fee brings in.
College leaders said the installment plan addresses concerns families have about affordability by providing flexibility on how they pay for school. Earlier this year, the regents allowed colleges to use payment plans for housing fees.
Officials said paying tuition in installments could ease the impact of changes to the HOPE scholarship, which is used by about 30 percent of the system's students, including more than 3,400 at Tech.
While the lottery-funded scholarship used to cover all tuition, the amount of the basic award can now vary annually. As a result, students and families can't easily predict how much they will have to pay and may need extra time to get the money together.
Tech officials estimate 10 percent to 15 percent of students will participate initially in the installment plan. Other colleges with similar programs find 10 percent to 40 percent of students sign up.
Regardless of Tech's success, Brown said some of the system's smaller colleges may still choose to work with Nelnet, the private company that offers the service, because the schools might not have the staff or software to run the program themselves.
Nelnet administers tuition payment plans for about 5,500 schools and colleges across the country. The company charges students an initial enrollment fee of $50. The company prepays the tuition and fees on behalf of the student and the student repays the company.
Brown said there are concerns the company might set a maximum amount they'll pay that might may not cover all the costs students have at the system's most expensive schools, such as Tech, the University of Georgia and Georgia State University.
Tech's in-house program won't have that issue, he said.
Also, if colleges run the program themselves, they can offer more one-stop services for students, Brown said. For example, staff will have another avenue to meet with students and discuss financial aid options that could reduce costs.
"This is another tool in the toolbox to help students break up payments," Brown said. "This will allow them to pay as they go, so they can afford to stay in school instead of taking a semester off to work."
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