College tuition: Past due

Six smart higher ed practices for managing delinquent student accounts

When Tyson Cooper began working in student accounts 10 years ago, debt collection on college campuses was viewed as purely business and “a necessary evil,” says the director of student financial services at the University of Southern Virginia.

Today, with increased attention on student success and the long-term effects of unpaid accounts, institutions need to recognize the impact financial services staff have on recruitment and retention. It’s a shift to thinking more about the big picture.

Campus leaders increasingly consider the professionals who help students fulfill their financial commitments—mandatory for degree completion—as key partners, Cooper says.

Yet collecting unpaid debt from students is by no means easy: Collectors must delicately try to preserve a student’s positive relationship with the institution while ensuring the financial integrity of the enterprise.

Widespread social commentary about the national student debt crisis and the role of rising tuition rates can influence students’ attitudes about paying as well.

For instance, more than half of responding undergraduates said the debt they create as students is “an unfair start to my working life,” according to a survey of British, American and New Zealand college students conducted by researchers at the University of the West of England.

“The relationship we establish with our students is more meaningful and impactful than what they may experience with other service providers,” says Doug Schantz, director of Office of Student Accounts at Wittenberg University in Ohio.

“The strength of that relationship sometimes serves as a great foundation for us when it comes to collections; however, depending on the student’s educational experience, that relationship could also hinder our ability to collect fees associated with that experience.”

In the corporate world, most creditors simply turn late payers over to collections agencies. In higher ed, collections agencies may get involved, but successful institutions first tend to take several important steps that can result in getting paid and boosting student success.


Establish a student-first culture.

The student financial services office may deal primarily with money, but as with other campus departments, helping students reach their goals is becoming a focus. For instance, Cooper’s office at Southern Virginia has collected 99 percent of current year receivables every year for the past six years.

“The key to our success is that our approach is student-centered,” he says. “There isn’t any shaking them down for their money.”

Instead, students and their families are told they and the university are on the same team. The student wants an education and the university wants to provide that—as well as to help get that bill paid so they can continue with classes. “People would rather pay someone who is helping them,” Cooper says.

Making it easy for students to access their account information and interact with staff is also indicative of a student-first culture.

Schantz at Wittenberg says equipping students with the proper tools to access their account 24/7 and then make payments—or give access to someone else who may be paying—is the most important aspect of collecting tuition and fees.


Communicate policies clearly and in advance.

Institutions that are most successful at collecting past due balances “have very clear and concise, but robust, upfront agreements with students,” says Chad Echols, an attorney based in Rock Hill, South Carolina, who regularly works with higher education collections. “They lay out upfront exactly what it will cost.”

At Johnson County Community College in Kansas, for example, students must sign a Statement of Student Financial Responsibility at registration, says Gayle Callahan, director of bursar operations. The document outlines the responsibilities of both the student and the college.

Say a student has an unpaid bill before classes begin. Under the terms of the agreement, the student is dropped from any registered classes (and seats are opened up for others).

After each semester’s refund period, the college puts holds on student accounts with outstanding balances, barring them from enrolling in further classes or applying for transcripts. The college will send a series of letters to students with outstanding debt, and if the balance remains unpaid, it will be turned over to a collection agency.


Be proactive.

Institutions with strong collections track records work quickly to get the attention of students whose accounts are slipping into delinquency.

Modern technology makes it easier to reach out to students earlier, says Harrison Wadsworth, executive director of the Coalition of Higher Education Assistance Organizations, a group of college and organization partners that promotes student-friendly, campus-based loan and tuition payment programs.

That timing is key, says Beth Stack, associate vice chancellor of student financial services at the University of Pittsburgh. “We have found the earlier we make contact with a student who appears to be struggling financially, the better the probability the issue can be resolved without a break in enrollment; that’s our goal.”

Those early contacts start with reminders of payment due dates, followed by a series of communications that go out when late fees are assessed to their accounts. The messages explain where to go for assistance—and what might happen if their balance remains unpaid.

Similarly, at Southern Virginia, financial staffers start contacting students with unpaid balances as soon as the semester begins, Cooper says. “We contact via email and phone at least weekly, and for those who are struggling the most to pay, we even make house calls, visiting them outside their classes and in their dorm rooms.”

Faculty advisors and coaches often participate in those visits, he adds.


Make it personal.

Successful tuition collectors understand a one-size-fits-all solution will work. At the University of Minnesota, student finance officers make contact by phone. “Having debt is emotionally difficult for anyone, so they would rather not talk,” says Thomas Schmidt, associate director of the Office of Student Finance.

“But the best way to help is to find out their situation and work to help them move on or determine an affordable payment plan.”

Efforts to handle collections in-house before referring accounts to outside collections agencies are done in an effort to focus on uncovering possible solutions. “Students want to continue their path to a degree, so they would pay their balance if they could,” Stack says.

“We see our role as assisting students and their families in identifying options that will allow them to make payment and continue their educational objectives.”

At Kutztown University of Pennsylvania, declining enrollment has spurred the office of student accounts to increase its internal outreach, says Wendy Pursell, director of the department.

Three weeks before the end of the fall semester, office staff contacts on-campus residents with delinquent accounts to let them know that if they don’t clear their debt, they will need to check out of housing and potentially lose their room assignments.

During the advising period for the next semester, staffers make phone calls to remind students that their future term enrollment appointments are nearing and they must clear their accounts to take advantage of that appointment.

In each of these communications, the main message, says Pursell, is this: “How can we help?”


Offer payment plans.

A number of colleges offer payment plans for past-due accounts, so that students can continue to take classes while paying off the debt.

At Texas Tech University, for instance, students with outstanding balances can apply for a “prior-term loan” if their current year financial aid will cover past-due balances, plus current term charges. They sign a loan promissory note, which releases the enrollment hold so the student can register for the next term.

When aid is applied to the student’s account and subsequently refunded, the student has five business days to repay the loan or their current registration will be cancelled.

To date, the bursar’s office has issued about 750 prior term loans and lost only about four of the students, which has been helpful for student retention as well as collection, says Christine Blakney, managing director of student business services.


Build campuswide support.

Tuition collections doesn’t happen successfully in a vacuum. Instead, effective financial services officers are soliciting support from others across campus. “Administrators outside our area usually have a stereotype in mind when thinking about what we do,” says Schmidt of the University of Minnesota.

“They need to know that we care about the students and do want them to succeed.”

The idea is to get other administrators to encourage students to contact the Office of Student Finance as soon as they are having problems. “It is a lot easier to direct them to areas where they might get help when they aren’t too far behind than if it has gone many months and possibly to an outside agency,” he says.

While administrators and faculty may understand the importance of maintaining the institution’s fiscal integrity, few understand “how hard and tedious the work really is”—including the fact that each student’s potential funding options may be different, Pursell says.

“Working with a student means trying to resolve the current issue and addressing ways to avoid issues in the future.”

Nancy Mann Jackson is an Alabama-based writer.

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