Best Practices for Student Payment Plans
The costs of higher education continue to challenge students, while the pressure to reduce administrative overhead and improve efficiency is constant for institutions and their executive leaders. Taking the right approach to student payment plans is one way to address both of these concerns.
By providing students with flexible, customizable payment plans, institutions can ease some of the financial burden and ensure that more students remain enrolled through completion. At the same time, with the right strategy, institutions can simplify and centralize their payment processes, saving time and money and freeing up administrative resources that can help to drive institutional and student success.
This web seminar outlined some best practices and practical strategies for providing payment plans, with an approach that can benefit students as well as the institution.
Denise K. Burt
Santa Clara University
Kelly Lagana: We did some research, and when we asked students about payment plans, very few were even aware that was an option. But those who have used a payment plan had a positive experience. They like the options and the selectability that payment plans provide. They like to use plans to alleviate payment problems, and using payment plan software with notifications solves communication problems regarding what students owe. It’s also a great budgeting tool.
If you’re a school that is looking to implement a payment plan, there are some things you need to consider before you get started. For example, there are a couple of different kinds:
1. Managed plans are handled by an outside source—marketing, customer service, call centers, payment processing, and reconciling and reporting are all taken care of.
2. With an internally maintained program, the school is responsible for all of those aspects. It requires a significant amount of skilled resources. You also need to think about your institution’s budget, your capacity within your business office teams and skill sets that you have available; is this something you can take on yourself, or is it something you would need to send for outside help? There are also regulations to consider, so check with your school’s legal team.
When you’ve decided how you want to move forward with your payment plan, you need to think about how you want to execute it. Especially when you’re just starting out, we recommend that you keep it as simple as possible, and then grow and learn from your students. Most software tools have a lot of flexibility built in and they allow you to change as you go, so you can respond to what works. You also need to think about the number of plans you want to offer, the balance types, open and close dates, when you are expecting your students to start these plans, when to start giving your money, and when you want to have your money back in. All schools do this differently.
Marketing is very key. It’s important to get the word out, and to get it out early enough so students can take advantage of it. If you can market those plans, you will see an increase in enrollment, and down the line it will relieve a big headache for the resources in your office, especially at those peak times of year when payments are due.
Denise Burt: We handle our plans internally, but be very careful about starting off that way. The reason we chose to do it internally was because I wanted to learn the system. It was a good way for me to understand the Cashnet setup. But the first year was very painful, and without the help of Cashnet support we probably wouldn’t have gotten through it. Now, in our fourth year, it’s become much more seamless and we know what we’re doing.
When we signed up with Cashnet, we wanted to make sure that we retained the features from our old system, but with an online capability with real-time connection. Having our payment plans pull in real-time account activity is incredible.
We know that the data reporting is accurate, and our controller’s office loves that. If students add or drop classes, or get additional financial aid, there’s something called a rebalancing that will pick that up and adjust the payment requirements. No more budgeting out of crisis—whatever the computer says is owed, that’s what gets pulled into the payment plan.
We are not waiting around for a check. If a student wants to be on a payment plan, they have to put in their bank account information. A huge plus is the ability for authorized users to also enroll in a plan—parents like that they can enroll in the plan on their student’s behalf. And students and parents can review the plan data at any time.
We charge $40 per term to be on the plan. One reason we have taken it in-house is because we’re always looking to generate revenue. We have about 900 families on this plan, so we are getting $90,000 to $100,000 in revenue every year. We’re putting this revenue back into our new institutional loan program, so we’ll have money to give back to the community.
We are definitely more efficient. When you take the human aspect out of anything, it’s always better. When you’re doing manual payment plans, you open yourself up to error. Having this all systematic is quick and is easy.
To watch this web seminar in its entirety, visit universitybusiness.com/ws030818