Financial aid award letters will be arriving in the mail soon.

I had a ritual as a student at Loyola University New Orleans. Once a month, I took some of the cash I'd earned at my bartending job to the bursar's office and handed it over. I participated in a monthly tuition payment plan, and I paid as much as I could afford out of pocket. As a working-class kid paying for college on my own, the payment plan was a lifesaver. It helped bridge the gap between my financial aid package and the true cost of college - without loans.

Financial aid award letters will be arriving in the mail soon. For most families, there will be a gap between the actual cost of going to college and the financial aid received. Making monthly payments directly to the school is one inexpensive, convenient way to bridge the gap.

A monthly payment plan is essentially a low-cost, interest-free installment plan. Here's an example of how it works.

The Ohio State University payment plan is called Tuition Option Payment Plan, or TOPP. To participate, you'll pay a $30 service fee per semester. The bill for each semester's tuition (after aid) is separated into three payments. All are due during that semester. You can pay the bill online via transfers from checking and savings accounts. The school also accepts credit cards but charges a 2.75 percent fee. The first payment is due about seven days before classes begin.

Most colleges offer some sort of monthly payment plan. Most can be set up through the bursar's office or online. You can sign up once you enroll for classes. Some plans cost nothing, but many charge a fee each semester to participate. You'll have to read the fine print to know the details, such as due dates, whether you can direct-debit from a bank account, any processing fees for credit cards and what fees are assessed for missed and late payments.

Annual fees are usually less than $100, according to FinAid.org, an online financial aid portal. For example, at Denison University, the fee is $80 for a 10-month plan, $100 for a nine-month plan and $120 for an eight-month plan. Ohio University charges a fee of $40 per semester for its plan. Columbus State Community College also offers a plan and charges a $15 fee.

There are strong reasons to consider participating. First, it's not a loan, so you don't have to fill out an application. You also don't pay interest. That's a big money saver. Paying $4,000 via an installment plan instead of taking out a student loan that charges 5 percent interest would save you $1,056, according to Higher One, a tuition payment plan service provider. You'd save $1,538 in interest compared to a loan with a 7 percent interest rate.

Even if there's no gap, you might consider a monthly payment plan as a way to reduce overall student loan debt. I was able to avoid taking out about $6,000 in student loans during my time at Loyola. When it came time to pay those loans back, it was worth it.

Amount saved, payment plan vs. student loan

$2,000paid via plan

$4,000paid via plan

$6,000paid via plan

$8,000paid via plan

5 percent loan interest rate

$511

$1,056

$1,602

$2,147

6 percent loan interest rate

$629

$1,294

$1,955

$2,623

7 percent loan interest rate

$752

$1,538

$2,325

$3,111

Source: Higher One