A good student experience when it comes to making tuition payments is top of mind for all finance teams. And in that pursuit, many are facing a question: how do we best make decisions about when to add a new payment option for students?
“Risk is of the highest consideration when offering choice,” said Jennifer Waters, University Bursar at the University of Chicago. “You have to consider that families are trusting you to keep their information safe, and it’s also your responsibility to keep revenue safe for your institution, so balancing that is always of the utmost importance.”
Higher education leaders recently discussed this topic on a Flywire webcast “The Paradox of Payment Choice,”sharing experience and guidance on how they weigh the risks and benefits when it comes to payment choice. Here are five questions for institutions to consider as part of this process:
1. How deep is the provider’s compliance bench?
A payment provider should be able to assure students, families and institutions of two things: that their payment and personally identifiable information (PII) is secure, and that they’ll be the first line of defense when a political or economic situation is shifting globally (something we’ll tackle in point 2).
To the first point, the bar has been raised for vendor compliance with updates to the gold standards and regulations in payment security – including PCI DSS. Flywire CISO Barbara Cousins often stresses the importance of “taking the least amount of data you need to provide the service,” and making sure that vendors check all the right compliance boxes – including harder ones like the annual SOC 1 and SOC 2 audits. Those are extremely important, she says, because auditors come in and do real-time testing to ensure the highest level of security.
“Some of the things I would encourage all of you to do is find out if your vendors have any of these types of certifications,” Cousins said on the webinar.
2. Is the vendor truly global with an ability to provide localized support?
Having expertise in-market is critical to keeping institutions ahead of how regulations and monetary policy is changing around the world. In addition, a vendor’s ability to back this expertise up with around-the-clock multilingual support to help students and families navigate payments is paramount. Not only does it save institution staff time and resources, it gives students the assurance they need.
Take Nigeria for example. In one of the fastest growing regions for international students, monetary policy and banking regulations are in flux and have massive impacts on timeliness of tuition payments. It’s not something an institution wants to be surprised by. “We knew about Nigeria from Flywire, before we even got calls from students,” said Maria Brown, Director of the Cashier’s Office at North Carolina (NC) State University. “It was nice to be in front of it, and not be shocked by a student calling and telling you that the money wasn’t coming yet.”
As University of Michigan’s Director of Student Business Services, Bryan Howard put it, “I don’t have to worry about training my staff in all these different payment processes and how money comes out of one country as opposed to another country.”
Supporting families with payments doesn’t mean only with payment processing – but answering any questions around the payment itself. “I remember back in the day having to talk to parents who didn't speak English with the student translating, and how difficult that was when they were calling us about a payment,” NC State’s Brown said. “Well, Flywire does that for you. I haven't had that [situation occur] in years.”
3. What downstream impact does offering payment choice have on your existing business processes?
Managing many different vendors takes time. As Chicago’s Waters said, adding additional international payment channels impacts everything from how easy it is for students to make payments, to how many queries the team will receive, and how easy it is for the staff to reconcile payments. “It’s important to consider the entire operation when opening up choice to students,” she said. When time is freed up on these processes, Waters’ team can focus on the complex questions and student situations to keep students on track and on time with payments.
4. What impact will it actually have on your students?
Students, for their part, value guidance, and don’t want a menu of choices, recent third-party research commissioned by Flywire found. Surveying 1,800+ students from nine countries across the globe uncovered that three in four want payment guidance from their institution, saying that it would give them peace of mind that their payment is safe. As Michigan’s Howard said, “I don’t want students worrying about their payments. I want them to think about their studies and immerse themselves into the new culture. The last thing I want is a difficult payment process.”
Waters pointed out that it’s also important to get a really good understanding of what students want, “students might be looking for more efficiency, but they may not be communicating their needs clearly. For instance, they might ask for more payment options in general when they actually mean they want improved payment frequency.”
5. How do they support student financial needs and experience beyond that first tuition payment?
The financial needs of international students are changing – nearly 40% say that their primary source of funding is either from their institution or employment, according to the 2023 Open Doors report. International students need support beyond their payment – including payment plans and easy ways to get back on track if they fall behind in payments.
“The affordability crisis is now impacting international students,” Sharon Butler said on a recent podcast. “This group of students is looking for more flexibility in payment options. I think that we need to start looking at this group of students as needing the tools that we offer to U.S. students.”
As regulations around study abroad change in hot spots like Canada, the UK and Australia, the U.S. could be poised for even stronger international student growth. Institutions need to be prepared for that. In the 2022/2023 academic year, international enrollment at U.S. higher education institutions grew by 14% with one million students representing more than 210 different countries – with the decades-long mainstays shifting places.
The right payment provider can help guide you and your international students when things get really complex. But by bolting together different payment processors, some institutions are unknowingly making that road windy – and risky – to navigate. The more providers, the more complex the payment process is to manage for both students and staff alike.
For more information on leading institutions approaches to tuition payments and what students want:
- Watch the Paradox of Payment Choice webinar featuring North Carolina State University, University of Chicago and University of Michigan
- Listen to NACUBO in Brief podcast for insights and research on international payments
- Read the Unlocking the door to higher education: Global students’ perspectives on paying tuition payments report
- Find out how the University of Pittsburgh has achieved operational efficiencies by streamlining the payment process with Flywire