College tuition is due soon. What to do if you can't write a $45,000 check right now.

By Beth Pinsker

If coming up with that first tuition payment is making you panic, there are some options that could help

When you have a kid, you know certain things are going to happen, like first steps, lost teeth and high-school graduation. At a certain point, you realize college is coming, and eventually you know how much it will actually cost. Then you get the email telling you the billing portal is now open, and tuition is due by Aug. 1 or so - and all hell breaks loose in your brain.

Some 44% of parents have no idea how they're going to make that payment, according to a new survey from College Ave, a student-loan provider. Just shy of 50% don't have a plan for how they're going to make those payments for the next four years.

"It becomes more routine, but a lot of families don't realize the first year is typically least expensive," said Robert Farrington, founder of the College Investor website. Not only does tuition rise every year, but so might room and board and the cost of books, and schools tend to give the most aid during the first year. "Families can expect to pay 5% more each year successively. That can be a significantly higher amount in four years," adds Farrington.

The confusion is especially rampant this year, as the delayed rollout of the Free Application for Federal Student Aid (FAFSA) has made a mess of the traditional college-financing timeline. In previous years, families received aid packages in March and had time to appeal and plan before actually getting a bill. This year, many colleges are still scrambling after pushing back their acceptance deadlines to mid-June and are still trying to settle their classes.

"Everything is delayed. It's always been all about net revenue for the colleges, but just to get through this crazy year, maybe they're giving out better discounts," said Peg Keough, director of education for College Aid Pro, who hosted a webinar on the topic recently. "I have seen kids get off the waitlist and be offered dollars. I've seen families do double deposits, to see which schools work out best in the end."

At full sticker price, the first-semester payment for a private four-year college could be $45,000 or more. Most don't pay that amount, of course - but still, the amount due would likely be more at once than a mortgage payment or even buying a used car. If a family comes down to the wire and just can't make the payment, there are a few options.

Appeal for more aid

Many families get their aid offer and think that's it. Some appeal right away, which is the proper procedure, and negotiate on the basis of competing offers from other schools. This year, things are so late that families might get their bill and still ask for more help.

"There could be a second round of appeals, or more," said Keough. "That bill that's due in August can be changed if the net cost to the family goes down."

Do a payment plan

Typically, colleges break up the payments by semester, with one payment due in July or early August and another due mid-December. Schools using a quarterly system will have more payments. Most also offer the ability to pay monthly or at some other rate. The catch? Fees.

"They will charge you a finance fee of some kind and you might end up paying more than if you paid by semester," said Farrington. "But if you can't afford the full bill, then a payment plan is the only choice you have."

You also might be able to pay that monthly bill by credit card, which could come with additional fees and the risk of greater interest charges later, but that availability will vary by school.

"It's not very common - I have only had one parent say they were paying by credit card," said Keough, noting that's mostly because there are other ways to finance the cost for less interest and with greater borrower protections.

Puzzle it out

You do not have to pay that summer tuition bill in one big, fat check. "There's no best way to do it," said Angela Colatriano, chief marketing officer at College Ave. "We always encourage people to try to lay out a plan, and figure out things like annual tuition increases."

To do that, experts like Farrington say to start first with the money in any dedicated college-savings account, like a 529 savings plan, for a portion of it, and then see what can come from other savings and cash flow. College Aid Pro points out that if you can afford to put $100 a month toward college tuition while the student is going to school, that will save you from borrowing $5,000 over the four years.

Asking family for help can be a much bigger part of things now that the rules have changed to exclude any gifts from counting as the student's assets - so grandparents and other family members can help out without a financial-aid penalty.

"Obviously there can be surprises, but you don't want to get a year or two in and then not be able to figure out a way to finish," said Colatriano.

Borrow wisely

When it comes to borrowing, the place to start is with any subsidized and unsubsidized federal loans, because those will require no parent cosigner and you can delay repayment until the student is done with school. These loans are capped per year - with only $5,500 available the first year, of which only $3,500 can be subsidized for those who qualify because of financial need. Even if you don't need the money at the start, you might want to consider taking the full amount available to the student.

"You can't go back and get it if you decide you need it later," said Colatriano. "Those loans will be the lowest rates available and have great protections."

If that's not enough to cover the family's shortfall, then you might want to go back to the appeals step and try again for more money. The other choices are private student-loan borrowing, which will require a parent cosigner, or parent borrowing, which could entail federal or private loans.

For that, you really need to consider the return on investment the student is not only getting out of going to college, but also the ROI of their major, said Farrington. "This is the problem that a lot of families face going into this because they don't think about that. If you spend more than they're ever going to make, it's not worth it."

Make last-ditch efforts

If you're really struggling to put together the amount you need for tuition, there are a few other sources of money that people regularly tap, in much smaller numbers. These include home-equity lines of credit, 401(k) loans, traditional IRA or Roth IRA withdrawals, formal intrafamily loans or cashing out life-insurance value. None of these are good long-term financial solutions because they take away from retirement or other savings.

"The net result of going to college is that you're just trying to be successful in life," said Farrington. "You want to be happy - but spending too much could jeopardize that."

Got a question about investing, how it fits into your overall financial plan and what strategies can help you make the most out of your money? You can write to me at beth.pinsker@marketwatch.com. Please put "Fix My Portfolio" in the subject line. You can also join the Retirement conversation in our Facebook community, Retire Better with MarketWatch.

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More on financing college from Beth Pinsker

'Everyone should appeal': The new FAFSA could give you grounds to ask for more financial aidDesperate parents will pay top dollar to lower the price of collegeMy 19-year-old son wants to get married so Uncle Sam will 'kick in more scratch' for his girlfriend's financial aid. Is this a terrible idea?

-Beth Pinsker

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06-08-24 0635ET

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