5 smart practices for managing and collecting late tuition payments
Debt collection by higher ed institutions has evolved from a necessary evil to an opportunity. Financial services staff following up on delinquent student accounts are more likely to be thinking about the big picture of student success—and how their approaches can impact retention and completion.
Preserving a student’s positive relationship with the college is a key goal. Here are five ways to do that while also getting the collections job done.
1. Establish a student-first culture.
Tell students and families that they and the university are on the same team. The student wants an education, and the institution wants to provide it. “What can we do to help get that bill paid so you can continue with classes?” frames the conversation.
A student-first culture involves making it easy to access account information as well. Establishing 24/7 access, including allowing the student or their proxy the ability to pay electronically, is an important aspect of collecting tuition and fees.
Partners in collection: Third-party solutions
When internal delinquent account collection efforts don’t work, colleges must have somewhere to turn for help.
Third-party collection agencies have more resources than institutions for finding students, and their ability to report to credit bureaus provides an additional nudge for students to find a way to pay.
Colleges can help the situation by informing outside agencies of each student’s circumstances. A student who typically pays on time but has hit a rough spot and a student with little evidence of an ability to pay may be approached differently.
Institutions may also have access to state-sponsored debt collection services as a step in between internal collections and outside agencies.
2. Communicate policies clearly and in advance.
Colleges experiencing success in collecting past-due balances tend to have clear, concise and robust student financial responsibility agreements, which students generally sign at registration. Such agreements outline the responsibilities of both the student and the college.
For example, the terms will state that if there’s an unpaid bill a certain period of time before classes begin, the student will be dropped from those classes.
After each semester’s refund period, the college can put holds on student accounts with outstanding balances, barring them from enrolling in further classes or applying for transcripts.
The college will generally promise to send a series of letters to students with outstanding debt. If a balance remains unpaid, it will be turned over to a collection agency.
3. Be proactive.
Getting the attention of students whose accounts are slipping into delinquency quickly may well result in more successful collections and uninterrupted enrollment, administrators have found.
Messaging can begin with reminders of payment due dates, followed by a series of notes about late fees being assessed. Such communication should explain where to go for assistance and what will happen if the balance remains unpaid.
Effective contact methods include email, phone and even house calls to the student’s residence. Ask a faculty advisor or coach to come along and assist in a collaborative, student success-focused approach.
4. Offer options.
Attempts to handle delinquent accounts in-house before referring accounts to outside collections agencies keep the focus on uncovering possible solutions. Perhaps the financial services administrator can help the student and family identify less obvious options that will allow them to make payments and continue on the postsecondary education path.
A number of colleges offer payment plans for past-due accounts so students can continue to take classes while paying off debt. Such plans may include “prior term loans” if the current year’s financial aid can cover past-due balances as well as current charges.
5. Build campuswide support.
Financial services officers should solicit support from others across campus to succeed in campus collections (and change any stereotyped reputation of not caring about students at the same time).
The idea is to get other administrators to encourage students to contact the student finance office as soon as they have problems with payments. After all, it’s much easier to direct students to resources when they aren’t too far behind and the case is being handled in-house.
Read the original article on managing past-due student accounts.
Melissa Ezarik is senior managing editor of UB.