Impacting Affordability and Access: A Plan for Your Business Office

Payment plans can help increase retention and reduce bad debt by giving students convenient payment options

Business office leaders need to balance affordability and access with protecting their institution from bad debt. Reducing student accounts receivable is possible, even when increased enrollment and graduation rates are a priority. This web seminar, originally broadcast on November 14, 2014, featured Loretta Chrzan-Williams, director of student accounts at SUNY Monroe Community College (Rochester, N.Y.), who discussed how her institution decreased bad debt and improved student GPAs through implementing a simple four-step plan.

Managing Director
Nelnet Business Solutions

Nelnet Business Solutions is a $2 billion market cap, publicly traded company serving approximately 700 colleges and universities. Institution leaders can take comfort in our financial strength and experience. We offer actively managed payment plans, a new, revolutionary student-choice refund service, and campus commerce services to process every bill and payment transaction on campus. SUNY Monroe Community College has been a valued Nelnet Business Solutions client since 2009.

Director, Student Accounts
Monroe Community College

SUNY MCC has 14,800 full-time equivalent students, but an operating budget of only $124 million. We are a member of the League for Innovation in Community Colleges. In 2009, our new, business-savvy, data-driven college president set some goals for our institution:

  • Increase GPA and retention
  • Increase graduation rates
  • Expand the drop for non-payment

Because of our demographic and open-access mission, increasing GPAs and graduation is especially important at SUNY MCC. We often have large numbers of less prepared and first-generation students. There is the additional challenge of a local mandate to provide job training to non-traditionally aged students. Historically, we did two drops for non-payment within the first two weeks of August for the fall semester. These two drops for non-payment only covered students who would have registered through July. Students who registered after the end of July were never evaluated for the drops for non-payment. This left a big hole in the process and presented a significant bad debt risk. It was also simply not equitable.

Why this challenge and why now? There has been an increased emphasis on ROI for higher education costs, as well as a broader movement in higher education to tie funding to performance. At least 12 states already have funding tied to performance, and many more are formalizing plans to do the same thing. There is also the issue of loan default rates rising. Rising tuition rates have been a hot topic for many years. It appears, however, that the tone of the conversation has shifted from just the cost of higher education to the benefit of higher education. It had been long assumed the cost of a degree was well worth it. That assumption has been questioned lately.

Additionally, federal, state, and local funders want to see results. They are under pressure from taxpayers to justify education costs. The movement is gaining momentum. It behooves us all to ensure our graduates have minimal loans and are graduating in programs that are likely to lead to employment. To meet our goals, leaders at SUNY MCC developed a cross-functional work group consisting of members from Student Accounts, Admissions, Financial Aid, IT, Controller, Registration, Institutional Research, Marketing and other departments. This was an institutional issue, and effective change management necessitates getting all of the right people involved. We also needed to gather data, especially end-of-term GPS, persistence term to term, and bad debt at the end of the semester. We needed to make sure we knew where we were before we decided where we wanted to go and how we were going to get there.

From this data collection, we found students who waited to register until the week prior to term start were more likely to:

  • Have a lower GPA
  • Have a past due balance at the end of term
  • Were less likely to return in the following term

These data points were necessary to support any recommendation we were to make to executive leadership. Based on these findings, we decided to establish a registration deadline that was five business days before start of classes. We also established an application deadline of five business days before the registration deadline. We also developed a robust drop for non-payment calendar. We expanded our previous two drops for non-payment to five. That was essentially one drop per week through August and the first week of September for the fall semester. Anyone who registered by our registration deadline would be reviewed during the non-payment period and dropped if they had not paid or did not have a payment arrangement made.

We knew that this expanded drop for non-payment would have a significant impact on enrollment and budget. We had to make sure our president and executive team understood the implications of what we were recommending. We give students many warnings before we drop them. They get reminder calls, emails, paper letters, and automated phone messages. It was very important to communicate the rationale of this new process to stakeholders, including students, faculty and staff. We relayed the change at department and deans’ meetings, and through the faculty and staff newsletter. There was a challenge regarding our message of encouraging early registration.

Some faculty were under the impression that students who registered earlier had an earlier payment due date, which was not true. We asked faculty members to relay this change to students in class. Our marketing department created and hung posters around campus. There were also email blasts encouraging early registration. And upon the students’ initial registration for the new semester, they would get an email that detailed the due date, methods of payment, and monthly payment plan option. This email would include a link to the student portal, where they could view their account and sign up for Nelnet’s monthly payment plan. Results have included decreasing our bad debt by 38 percent, or $511,000 in the first year. The amount sent to collection decreased by $734,000 from Fall 2010 to Fall 2011. Payment plan enrollment increased by 41 percent for Fall 2011 compared to Fall 2010.

This enrollment increased because students who applied for financial aid late had to do something in order not be dropped. Payment plans give these students an option to stay in school while their aid is still being packaged. Our drop for non-payment increased 57 percent Fall 2011 over Fall 2010, which was painful but predicted. However, as time went on, the drop for non-payment started to decrease. As far as GPAs, we have made small progress, but we are moving in the right direction. We saw a .07 increase Fall 2011 compared to Fall 2010. The number of students on academic probation dropped by 252 students from Fall 2010 to Fall 2011. The conversation regarding higher education has shifted from “cost” to “benefit.” Funding is being increasingly tied to performance, or student outcomes. Effective change management depends upon support from top administration, good data, buy-in from stakeholders, and a communication plan for students, faculty and staff. It is essential to keep the focus on our core mission of student success. Overall, we have had a positive experience making this change, and have seen positive results.

To watch this web seminar in its entirety, please go to:


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