Four years ago, Hung Le called into his office a student who missed the registration deadline. “You don’t have any holds,” said the associate vice president and university registrar, Pepperdine University, Malibu, Calif. “I notice that you have not registered. How can I help you?”
The student, after hemming and hawing for a few moments, blurted out between sobs, “My mom has cancer. I don’t know whether I can afford to come back to school.”
To this day, Le chokes up when remembering the story. “Because his family’s financial situation had changed, I was able to connect him with financial aid, and he didn’t have to retell his story again. I retold it for him. The day he graduated was one of my happiest days here. But we almost lost him.”
This student, like many others around the country, struggled to continue paying for the cost of college when faced with a crisis; and Le, as other CBOs try to do, struggled to keep this student enrolled and on track to graduate.
But where and when should financial administrators draw the line … and just say no? And how can the business office honor its fiduciary responsibility to the institution, while removing economic barriers to student success?
Although these are the tough questions, with no easy—or right—answers, five members of NACUBO’s Student Financial Services Council recently gave these questions and others their best shot. While their answers reflect a variation in policies and programs, these five executives unanimously agree on one key ingredient for student success: The business office must be represented at the table when institutions consider various retention options.
Sorry, You Have a Hold
Like most institutions, Monroe Community College, Rochester, N.Y., forbids students who have balances that exceed a certain threshold from registering for the next semester.
“Being a large community college outside of an urban center, we have many students who are supporting families, either as a single parent or [as support for a family that is] disadvantaged economically,” says Loretta Chrzan-Williams, director, student accounts. “They come to school with the greatest of intentions, but something happens in their lives where they have to make a choice—continue with their education, quit and go back to work, or get a second or third job. That’s a reality that we face that may be unique to community colleges.”
For many years, the threshold for an outstanding debt was $200, but MCC in 2015 increased that amount to $500 to ease enrollment pressures, a move that nibbles at Chrzan-Williams’ peace of mind. “If you’re making sure you are a good steward of college funds, you want to expose the college to the least amount of risk,” she explains.
“Removing those holds to allow students to register with a $500 balance, versus a $200 balance, may be helping students in the short term, but it has the potential to create bad debt. Unfortunately, most of the college community—outside of the business people—don’t think of bad debt as a cost. But it is a cost. Bad debt can tap into the fund balance, and that is not a sustainable model.”
MCC, which enrolls about 14,000 students each semester, offers several emergency assistance programs in addition to federal financial aid. The Dreamkeepers program, designed by Scholarship America, provides mini-grants of up to $500 for current students in good academic standing who are facing a sudden hardship for unanticipated living expenses, such as child care, transportation, utilities, or medical expenses.
The program, initiated in 2015, has proven popular. Students apply for the grant on the MCC website. “If approved, the funds go directly to the garage that’s fixing a student’s car or the utility to pay the bill,” Chrzan-Williams says.
Another emergency program, funded by MCC’s auxiliary services, provides a bridge loan up to $500. “It can only be approved if the student has anticipated aid that hasn’t been paid yet, but has a dire circumstance,” she says. “We deduct it out of the financial aid when it pays.”
Unlike some other administrators at institutions, Chrzan-Williams empowers her staff to make special payment arrangements with students. “I don’t want to approve all of the exceptions,” she says. “If a student has a past due balance and we’re getting ready to send the bill to a collection agency, and he calls us and wants to work with us, fine. We will make special payment arrangements with him.
“If it is coming to the tuition due date and a student can’t pay and is afraid of being dropped for nonpayment, my staff can pull that student from the drop,” she continues. “My staff then has to follow up with that student later to make sure that she did whatever she said she would. But we give the student the benefit of the doubt.”
Staying Firm, But Flexible
Doug Schantz, director, office of student accounts, Wittenberg University (WU), Springfield, Ohio, takes a “firm, but flexible” approach to students facing financial difficulties.
“It’s firm because we try to validate that students understand they have an outstanding balance, and they need to take care of it,” he says. “Sometimes we are the first ones to communicate responsibility to these students. The whole college selection process is usually a warm and fuzzy courting relationship where everything that is great about the institution—including its culture and academic opportunity—is explained. When the tuition bill comes, it’s when the rubber meets the road.”
It’s a flexible approach, he says, because WU will more than likely work with the student and family if the institution has an idea what it can do to remedy an outstanding balance in the near future.
Schantz describes this scenario: “If the student owes $400 and says, ‘I don’t have it right now, but I’m working 15 hours a week at my campus work-study job. Based on my payroll, in the next two months I should be able to take care of it.’ If we do the math and the repayment makes sense, chances are we will make an arrangement with that student to get registered. But the math has to make sense.”
Schantz believes that this approach benefits both the university and its 1,800 students. “We don’t want them to get a balance that accrues and becomes unmanageable,” he says. “By allowing them to tack on yet another semester’s tuition, room, and board, it may become unmanageable.”
To track students who are encountering financial challenges, Schantz runs a nightly utility that collects information about students with an outstanding balance. “We can track the data and student characteristics, and find predictive flags that pop up in the hope of being able to identify common denominators.”
Schantz, who serves on Wittenberg’s retention task force, adds that business officers must ensure that the party responsible for paying tuition and fees, which is typically the student’s parents, is given access to financial information—all while staying within privacy laws.
“Given FERPA guidelines, we have to make sure that we equip students with the appropriate tools, so that they can pass billing information to the payer of tuition, whoever that might be,” he says. “Our students can self-identify and request that monthly statements go to their parents or grandparents. We’ve given the students control over that information and where it gets distributed.”
Interest-Free Loans Appeal
Texas Tech University in Lubbock takes a “pretty aggressive stance” on ensuring fiduciary responsibility, reports Christine Blakney, managing director of student business services.
“We do cancel for nonpayment,” she says. “We have a payment due date seven days prior to the first class day, which is obviously after financial aid has dispersed 10 days prior. If the student fails to make full payment or enroll in a payment plan by that due date, we have five to seven days before we begin cancellation. We initiate e-mails and phone calls—really any kind of contact we can—saying, ‘You may have gotten busy and forgotten. Please pay before this date or your registration will be cancelled.’”
With 36,000 fall students, Texas Tech may start the semester with upward of 6,000 students who don’t pay by the actual due date. “It sends chills through our academic departments,” Blakney says. Of those nonpayers, the institution generally cancels fewer than 500. Once cancelled, students are allowed to re-register, but they are assessed a $50 fee and lose their original class schedule. “We find that 56 to 60 percent of them re-register. Last spring, we cancelled maybe 200,” and most of those had no intention of returning, she says.
Registrations are cancelled before classes begin, to prevent unnecessary charges, Blakney explains. “If you remain enrolled in a class on the first class day, Texas laws require that you pay a certain amount for each day of class. By cancelling them prior to the first day of class, we are saving them that tuition.”
To assist returning students with an outstanding balance, Texas Tech offers interest-free and fee-free loans. “We’re not worried about minimal balances of $200 or less, but some students have more substantial balances,” she says. “If students owe us for a prior term and we can substantiate that their upcoming aid for the new term is sufficient to cover the past-due balance plus their upcoming semester, we will give them a temporary loan of the prior balance. As soon as they get a refund for their current aid, they have five days to repay us for the loan balance. This particular program has been hugely successful, with 495 students taking part in spring 2016.”
Blakney indicates that only one failed to repay the loan. That student was cancelled from the spring term’s registration.
To get messages out quickly and efficiently, the student business office—after obtaining global electronic consent to use student phones—uses Call-Em-All, an automated dialer service. Registration reminders stay simple: “Hey, we notice you haven’t yet enrolled for fall. We would like you to come back to Texas Tech University. Please contact us.”
Prior to possible cancellation, the message may be something like, “We know you’re busy. You may have forgotten a payment due date. Please contact us at your earliest convenience.” Blakney likes that the service features a tool indicating whether the call resulted in a live answer, voice mail, or disconnect. “We’re able to track metrics that way to know whom we’ve reached and whom we’ve missed.”
Another communication tool employed by Texas Tech advisers is the Education Advisory Board’s GradesFirst, which helps pinpoint at-risk students before they fall behind academically. The product records all notes and appointments so that they are available for reference. According to Blakney, advisers appreciate having financial and academic information at their disposal.
“In the past, advisers thought that they had settled academic concerns only to find out that the student didn’t enroll because of financial problems,” she says. “By letting them know that there may be additional issues, advisers have more control in assisting students.”
Blakney insists that the business office must be an essential part of an institution’s strategic priority to retain students. “We can have an impact on results,” she says. “We have to work in coordination with the academic officers and advisers to ensure that the best available solution is provided to each student on our campus.”
“If They Succeed, We Succeed”
To boost retention, the business office needs to partner and work with other areas of the institution, advises Hung Le.
“We need to see ourselves as part of an integrated system, and we need to be at the table,” he insists. “So often, the business office is not at the table when we talk about retention. It’s usually financial aid, admissions, and academics. We’re often viewed as the people who say, ‘If you owe money, you can’t go.’
“That’s our job,” he continues. “If we allowed every student to register without paying, nobody would get a paycheck.”
Le believes Pepperdine’s one-stop, integrated system benefits students because the business and financial aid offices work together. “As a Christian university, we do believe in the golden rule—treating others as we want to be treated. A few years ago, our president challenged us to go even further and to treat our students the way we would want our children to be treated.”
With about 3,400 undergraduate students, Pepperdine is able to treat individually each student encountering financial problems. “Our students are not numbers. They are human beings. If they succeed, we succeed.”
The university is unusual in that tuition is not due until after the add/dropperiod is over, and students are not dropped for nonpayment once classes begin. “If they don’t pay, there are late charges, but we do not drop enrollment for nonpayment. That’s a risk we take. At many schools, if you do not pay in the first few days or make arrangements, your classes are dropped.”
According to Le, the university retains this policy, despite the potential loss of revenue, because once they drop their classes, students may not be able to get back into those units. In addition, it’s too late for the university to fill those seats anyway. “If a student walks away and doesn’t pay, that is the risk we take. Only a handful end up not paying. Plus, many of our students have financial aid so that at least part of their tuition will be paid.”
On the other hand, once students accumulate an outstanding balance, they may not continue to register for future terms. “We take a proactive approach,” Le says. “Before registration, we run the list. If they have a financial hold, we ask them, “Have you signed all of your loan papers?” We take a look at certain students who owe a small balance and work with financial aid to see if they can apply for other loans or grants. We do everything we can to remove any barriers to registration.”
Emergency loans up to $1,000 help some students get over the hump, he says. “Many times student feel like they are stuck and they just don’t know what to do. We nudge them.”
Despite its commitment to retaining students, Pepperdine draws a line in the sand when it comes to extending payment deadlines: No exceptions are granted. “We find when we make exceptions for students, it exacerbates the problem,” Le says. “By extending the deadline or making exceptions, we’re just kicking the can down the road. We have to maintain our fiduciary duties, and students have to pay in order to go to school.”
Analytics Keep Students on Track
On a large campus, business officers must find the balance between treating each student situation individually and making blanket rules, says Gina Curry, associate vice president for financial services, California State University, Sacramento.
“Finding that balance can be tricky,” she says, “but it’s individual decision making where we have the most power and where we can be the most help. The hardest part is getting students to participate in the process with us.”
With 30,000 students, Sacramento State has rolling due dates for tuition payments and registration. “Most of our students—about 23,000 or the better part of 75 percent—have a financial aid deferment. Basically, they get the opportunity to wait for their financial aid to come after they have applied. The balance of the students have to make a payment within a certain amount of time or we do cancel them for nonpayment. Students who have applied, done their paperwork, and made their payments on time are the ones with the best chance of being in the classes they want. We have a rolling cancellation that goes with the rolling due date.”
Members of an internal collection staff have the ability and autonomy to (1) work with students on a payment agreement, (2) release the hold for the next term while students are in the midst of making payment, or (3) get students over to the financial aid department to apply for other forms of aid or emergency loans.
“Most often the students who get cancelled or don’t go forward are the ones who don’t communicate with us,” Curry says. “If students participate in the process, come in and talk to us and tell us what’s going on, and identify that this is a one-shot deal, we find that they can usually overcome the anomaly and become successful.”
Occasionally, the outlook is not as optimistic and the internal collection staff must tell a student: “You’re not prepared to be here. You don’t have a plan, you don’t have the means, and you don’t have financial aid. The state taxpayers aren’t here to subsidize you hanging out.”
“We don’t want to be the dream killer,” Curry says, “but on the other hand, we have to be realistic. At $3,450 a semester, we’re low cost. It’s not our tuition and fees that create the barrier.”
In the last year, Sacramento State has been taking what Curry calls “baby steps” toward the use of analytic and data software. “We have three tools new to our toolbox,” she says.
- Smart Planner tells whether students are on track academically. After considering a student’s current semester schedule, the software uses degree road maps to apply chosen degree requirements and generates a recommended, multi-semester course sequence through graduation.
- Platinum Analytics provides business intelligence for the creation of student-friendly and efficient course schedules. Sacramento State is expecting to predict semester course schedules based on historical course demand and Smart Planner data.
“The third tool is a financial aid, progress-to-degree meter that we are developing to tell students when their aid will run out,” Curry says. “We have a large transfer population from our community colleges. Many times, they max units before they have completed their degree, a common problem. We’ll be able to leverage that information, pre-identify students who are at risk to run out of aid, and intervene early.”
Margo Vanover Porter, Locust Grove, Va., covers higher education business issues for Business Officer.