Less punitive, more partnership: New approaches to collecting past-due tuition are working for these higher ed institutions

Wide-sweeping changes handed down by the DoE go into effect on July 1 that prohibit institutions from withholding transcripts for late or unpaid tuition involving Title IV funds, in certain circumstances.

Some of the guidance is not yet completely clear, but under the DoE’s rule, institutions must provide official transcripts to students for payment periods when Title IV funds were received and “all institutional charges for that payment period were paid or included in an agreement to pay,” according to NACUBO. Whether “agreement to pay” means institutional payment plans or promise-to-pay provisions included in college and university Student Financial Responsibility Agreements isn’t clear at this time, according to NACUBO. The new rule also adds financial aid counseling requirements around administering the funds, and bans institutions from withholding a transcript for debt that accumulates because of an error in administering the funds.

What can institutions do now to prepare? Look to forward- thinking institutions, who have been laying the tracks to concurrently boost student success and operate in a shifting legislative and regulatory environment for a long time. They are focused on reducing the number of past-due accounts, and keeping students enrolled at a time when retention is crucial.

“We can concentrate more on working with students, sending them to a payment plan and keeping them out of collections,” said Geri Landwehr, who is the Bursar at the University of Northern Colorado.

Landwehr spoke on a Flywire webinar, “Embracing Change: Ways to Navigate Legislative Impact on Collections,” where education experts and finance leaders shared their advice on how they’re future-proofing against a legislative and regulatory environment in flux.

Colorado is one of nine states that already puts restrictions on using a transcript hold if a student hasn’t paid their tuition bill. At the University of Northern Colorado, Landwehr and her team have reduced the number of student accounts being referred to collection agencies by half, using a combination of strategies her counterparts at Texas A&M and the University of Pittsburgh echoed on the Flywire webinar that attracted hundreds of attendees. This includes:

  • Sharing data to encourage cross-departmental collaboration and action
  • Moving outreach about past-due bills up earlier and automating communication
  • Offering up targeted interest-free plans that are easy to sign up for, manage and ultimately pay

This all leaves more time for finance to dig into the issues behind late payments, and marshal stakeholders and solutions to keep students enrolled.

“A hold is not a punishment. It’s an opportunity to work together before enrollment begins for the next term,” said Carolyn Kaikaka, who is Associate Vice Chancellor, Student Financial Services at the University of Pittsburgh. “Collections is always viewed as the inflexible people, but we are really here trying to help students and it’s more of a team effort. Information sharing has spurred more collaboration.”

Landwehr and Kaikaka were joined by Bryan Dickson, Director, Student Financial Services & Education Programs at The National Association of College and University Business Officers (NACUBO) and Jennifer Lightfoot, executive director for Student Business Services at Texas A&M. They shared the following strategies for improving collections – which ultimately improve student retention:

Surface data, make it consumable and share it. At the University of Pittsburgh, using technologies like Tableau is helping paint a fuller picture of a student’s financial need by making data accessible to multiple stakeholders, even department administrators. It’s easy to filter by different statuses to find, for instance, students who are doing very well academically but have fallen behind on payments and pull together the right strategies to help them.

Marshal ways to get students over the finish line. In a similar vein, Lightfoot and her team at Texas A&M identify students with unpaid balances who are close to graduation, and work across multiple departments to solve their financial needs and help them pull through to commencement. This could be a combination of untapped financial aid resources, outright grants or payment plans. From disaster relief scholarships for students who have experienced an unanticipated hardship from, for instance, a natural disaster or illness, to emergency tuition and fee loans, Texas A&M prioritizes giving students flexibility, and is constantly seeking ways it can expand options to cover financial hardships.

Move up the collections timeline. The University of Pittsburgh switched a few years back from static, monthly bills with rolling due dates, to a dynamic account balance with a single due date. Pitt uses Flywire to send balance due notifications 7 weeks before the due date to give families time to plan, resolve aid issues, and ask questions. It begins the collections process the day after the due date, so the university can identify and help students facing challenges well before the term ends.

Use technology to automate processes, optimize staff. Because Flywire automates much of the collection process for the University of Northern Colorado, it didn’t need to replace two jobs of people who retired. Success with that project bred enthusiasm and support for additional automation projects that take away not-so-engaging work, such as handing out checks.

“The people in our office were happier because we were able to make their work-life more varied. Instead of having one person who reconciles all of the collection agencies, we were able to divvy those out,” Landwehr said, adding that it comes with the added benefit of having cross-training built in.

Be flexible. Change is always a good opportunity to re-examine processes, Dickson reminded the attendees.

“How effective are your processes?,” he said. “Is a transcript hold the best tool in your toolkit? Look at your data. Maybe there’s payment plans that can be involved here.”

  • We’re one of the states that can't hold transcripts or diplomas. We counsel students on debt collection and then encourage them to sign up for a payment plan through Flywire. Since we’ve started using Flywire, we’ve seen a 47% decrease in collections sent to outside agencies.
    Geri Landwehr Bursar, University of Northern Colorado
    Bursar, University of Northern Colorado

  • State houses like to look to each other for ideas and examples, and what bubbles up in one state may in another. It’s worth keeping an eye out on that landscape.
    Bryan Dickson Director, Student Financial Services & Education Programs, The National Association of College and University Business Officers (NACUBO)

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