The Perfect Payment Plan and Tracking Pending Aid

Developing consistent payment plan policies, processes and procedures

Dealing with covering financial shortfalls in student packages, managing tuition refunds and providing excellent customer support with small staffs are common problems business offices face. This web seminar, originally broadcast on May 8, 2014, featured a financial leader who explained how her institution adapted department policies as enrollment continued to rise. She also discussed the positive impact that providing payment plan options to students and pending aid tracking had on her institution.

Marla Moody 
Vice Chancellor for Finance
Ozarks Technical Community College (Mo.)

We can get students in the door, but then how do we collect that tuition and fee money? Payment plans are a part of our lives, and student financial aid is also. But we found that we needed a bigger solution. We needed to look at outsourcing. And we found that the perfect partner for us was Nelnet. In 2004, we had 8,000 students. We were giving them three choices about paying for college. They could either pay in full, they could have a relative pay for them, or they could get financial aid. We also did offer a payment plan: Students would pay 50 percent by the final payment date and the remainder was due 45 days after the beginning of the semester.

For that fall semester, we processed a little over 1,100 payment plans. All tuition and fees are due prior to the first day of classes, and class schedules are cancelled if there is nonpayment at that time. So the lines were very long on a final payment deadline. It had become pretty much a nightmare for us. We had a limited number of cashiers, with five different cashier windows open. Phones would be ringing off the wall—we were actually still taking credit card payments over the phone, and PCI compliance was not something that we were dialed into at that point. And I remember students who had been standing in line would also call us on their cell phones because they thought maybe they could jump the line and get an answer faster. For a payment plan, the student had to come to the campus and show ID. We took pictures of the driver’s license, and if they needed a cosigner, their ID also. You signed the promissory note and paid your 50 percent. This all tied up cashiers’ time completely. We were so busy that we limited our personnel to just a 30-minute lunch break, and if they could eat faster, that was good. We brought food in so they wouldn’t have to leave the building. We wrapped up that process about 10 p.m. to midnight, and then started our deregistration process. And this was at only one campus.

In the spring of 2005, we were getting ready to open our second campus. I knew we couldn’t continue this same procedure—we needed to outsource. That’s when I came across Nelnet. Nelnet allowed us to change our process quickly. It didn’t involve a large infusion of cash, nor did our internal IT department have to spend many hours customizing the Nelnet program so that it fit within ours. We also found that there were no policy changes that we needed to make. In fact, policy stays the same today—all college tuition and fees are still due before classes begin.

Bob Gentile  
Executive Vice President
Nelnet Business Solutions

In this day and age, it’s not how much it costs. America doesn’t live there any longer. It’s really, How much does it cost per month? So when we talk about access and affordability, that’s what we’re really talking about: How can you break this down to make it more affordable for the student? We look for a plan that’s flexible enough so that everyone fits into it somewhere. Under one umbrella you can have any number of payments. You can start and end at any time in the course of a semester or an annualized plan. There’s no interest, qualifying or credit check. There’s no minimum dollar amount unless you want to initiate that, and if you did, we would suggest that it be a low amount.

Then there are a number of options. Maybe it’s nothing down and the student makes six payments. If they wait a little bit longer, it might be 10 percent, 20 percent or 30 percent down with five, four or three payments. You want to give students the option. Obviously, the sooner they register for classes and get a payment plan, the sooner they are up and running, which is good for them and good for business. With our Pending Aid product we provide a proactive way to streamline your internal process and stop chasing students who are still waiting for financial aid in the middle of the term. Using our Pending Aid process, all students awaiting financial aid register for a payment plan that remains in a “pending” status—it’s not activated yet and they haven’t yet paid the fee for the plan. If the student receives full aid and there is no remaining balance on their account, the process ends right there. If there is an aid shortfall, the student gets the opportunity to pay for that shortfall in full. If they cannot do that, their payment plan is activated. Sometimes I call this a “just in case” account. Just in case you don’t get the full aid amount, just in case you are not able to pay off the remainder, we will automatically roll your balance into a predetermined payment plan.

There’s no need to scramble in the middle of semester, stand in line one more time and make a deal for how you are going to handle the outstanding tuition obligation.

Moody: It was 2005 when we put our new processes in place. Things were successful. Phones were still ringing, of course, but at least the staff had time to help those students who really needed individual attention. They could leave the building if they wanted to go to eat lunch, which was great. Our payment process became electronic almost overnight, and there’s a seamless transition from the college’s website to the Nelnet website. In the spring of 2005, we had 8,000 students. That semester, 1,500 paid in full and we had 1,500 on a monthly payment plan. We had about 5,000 students who had applied for and were eligible for some type of financial aid package.

That’s when our pending aid tracking began. Out of those 5,000 students, 2,700 received a 100 percent financial aid package. So for 2,300 we did need to activate the payment plan, and by the time the semester ended, less than 70 students still owed us a balance. The previous semester, almost 1,600 students still owed a balance. So I was happy with those new numbers. Another a great improvement was with the number of receivables. Nelnet sped up our cash flow processes. In 2004-05, our receivables that were close to a year old totaled $2.2 million. In 2006 that fell to $1.2 million, a 43 percent decrease. And during that period of time we’d had an enrollment increase of 4 percent, so we certainly were going in the right direction. In the fall of 2013 we were just shy of 15,000 students. Ninety-one percent chose some type of payment plan, and of those, about 10,000 were pending-aid plans. Close to the end of the semester we had about 5,400 that did not have 100 percent aid packages, and we were able to use their pending aid plan to collect that balance.

So, this tool has been very successful. As our college continues to grow, student accessibility and affordability are primary concerns. By outsourcing with quality partners such as Nelnet, plus increasing the use of available online processes, we have the ability to deliver outstanding customer service to students at all five of our college locations, including our online community. If we can excel in meeting our student expectations, then we all win.

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


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