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Financial Aid and the Business Office

Building an effective relationship between these two departments depends on five key factors.
University Business, Jul 2007

AS COLLEGE TUITIONS rise, strong and effective links between Financial Aid and student billing processes and staffs become increasingly important. Financial Aid must also partner well with Admissions in support of achieving new student enrollment goals.

Administrators most concerned about the former relationship often employ a "student financial services" model, combining the Financial Aid and Business (student accounts) offices, often under a vice president of finance. Those most concerned with the latter relationship typically use an "enrollment management" model, combining Financial Aid and Admissions, usually under a dean or vice president of enrollment. There are clear advantages and disadvantages of each model, although determining the best approach for the institution depends in large part on the culture and relationships that exist at each campus.

Regardless of the organizational structure, Financial Aid needs to bridge both worlds. Here are five key factors necessary to build an effective relationship between Financial Aid and the Business office.

It's a fine line that distinguishes between whether a call from a parent or student belongs in the Financial Aid office or the Business office. Conversations tend to begin with questions about an outstanding student account balance and lead to missing financial aid forms, or vice versa. Even more common: Calls that originate in another campus office, such as Admissions, and are transferred to Financial Aid for help with billing questions. In order to minimize transferring calls across campus, which increases caller frustration, a "best practice" would be to answer aid and outstanding bill questions all at once.

Walking back and forth across campus can quickly lead to customer frustration.

The ability to answer these questions- both generally and in moderate detail-requires that, first and foremost, the Business office and Financial Aid have full viewing access to each other's screens within the campus enterprise system (e.g., Oracle's PeopleSoft, SunGard Higher Education's Banner, Datatel Colleague).

This is even more critical if the two offices operate on different systems (e.g., Banner and the College Board's Power- FAIDS). Access alone is not the solution. Sufficient training must be provided, particularly for the front line and counseling staffs, so that they may find, interpret, and properly communicate appropriate and accurate information to parents and students. Ideally, internet access through a secure portal would also be provided for parents and students to have 24/7 access to both financial aid and billing information.

Whether your institution operates under the enrollment management model or the student financial services model, physically locating the Business and Financial Aid offices next to each other will both directly and indirectly improve customer service.

The obvious direct result is that students can access both offices without making trips across campus. Often, unpaid student accounts are, at least in part, a result of incomplete financial aid forms. So while the Business office may place the student on a registration hold, it's the Financial Aid office that needs to see the student and collect additional information. Like multiple telephone transfers, walking back and forth across campus (especially in bad weather and when long lines are involved) can quickly lead to customer frustration.

The indirect improvement to customer service results from the improved efficiency and communication that occurs with side-by-side offices that can address and resolve issues quickly among staff. In addition, physical proximity fosters relationships between staff, especially those with shared responsibilities, such as the counselor in Financial Aid who processes the loans and the student account representative in the Business office who posts and reconciles the loan disbursement files. The dynamic between the leadership of both offices is also critical, as it will set the tone for the remainder of the staff. A cooperative atmosphere that begins at the top has more potential to build camaraderie throughout the organizations.

Jean Main, director of Student Financial Aid Services at the University of Connecticut, reports to a vice president of Enrollment Management and has an office across the hall from the Business office. Main describes the relationship between the Business office and Financial Aid as outstanding. "All parties involved, from executive level management to clerical and professional staff members, understand that the effectiveness of the relationship has a significant impact on students, the offices, and the university. All staff members have benefited from working as a team; it is more enjoyable and makes their jobs easier," she says.

Federal Title IV financial aid, and in most cases state aid, is governed with a plethora of regulations and processing requirements and also includes the appropriate checks and balances to prevent those who award the funds from also disbursing them. As a result, staff in both the Business and Financial Aid offices must be appropriately trained to administer the programs efficiently and within appropriate guidelines.

Staff should attend joint training such as conferences, workshops, and regional meetings. For example, in New York state, the Higher Education Services Corporation- the agency responsible for administering the NYS Tuition Assistance Program (TAP) and other state grants-offers regularly scheduled workshops throughout the state. They're attended by both financial aid and business officers involved in the oversight and implementation of these programs. These workshops provide regulatory updates, data exchange and reporting mandates, as well as opportunities for practitioners to provide feedback that can lead to more efficient processing.

Timely aid awards lead to "cleaner" bills, more ontime payments, and lower accounts receivable.

In addition to attending off-campus training, Financial Aid and Business office staff should schedule monthly or quarterly meetings to discuss process improvements and train each other on respective happenings in the industry. For example, Financial Aid staff should be keeping business officers "in the loop" regarding the current investigations in the student loan industry and guidelines that relate to establishing "preferred lender lists," so that business officers are aware of the front end of the process and how it relates to the back end for which they are responsible.

Mutual respect is more important than reporting lines and fosters support instead of competition. An appreciation for each office's role in the mission of the institution and an understanding that each shares in the other's goals lead to greater efficiencies.

Timely aid awards, for example, lead to "cleaner" bills, which lead to more on-time payments and lower accounts receivable. Identifying weak links in the process and working together toward corrective action, whether it is through improved use of technology or changing business practices, will result in fewer telephone calls and walk-in appointments and greater overall efficiency. Avoid the "blame game" and focus on working together toward common goals.

Oklahoma Christian University has a combined business model within the student financial services umbrella that employs personal financial counselors (PFCs) instead of traditional financial aid counselors or student account representatives.

Vice President/CFO Jeff Bingham describes the approach this way: "Each PFC develops and maintains a relationship with an assigned part of the student body. In the process of securing financial aid for students, PFCs can communicate about plans and expectations for payment of the balance of charges not covered by financial aid." Over the nine years this model has been in place, enrollment has grown by more than 30 percent; tuition, fees, and room and board have increased by an average of more than 5 percent annually. Yet both total accounts receivable and average accounts receivable per student have declined.

Neither Financial Aid nor the Business office should add unnecessary steps to their processes for students. Financial Aid should examine whether a required institutional aid application, signed award letter, or signed loan request form is necessary or is simply another obstacle in an already cumbersome process. Business office administrators should be sure that the billing statement is user-friendly and clearly identifies the "net" balance due (after actual and pending financial aid), so that families can promptly pay without additional telephone calls or e-mails to either office.

Administrators in both offices should ask themselves what topics and questions cause the most workday interruptions and determine how to communicate better on those issues. These offices have the unenviable task of talking to customers about money, which can be embarrassing, frustrating, and require sensitivity. Supporting each other and providing consistent, reliable service leads to satisfied customers and success in meeting goals.

Keep this equation in mind: Fewer incomplete financial aid applications = fewer accounts receivable = fewer workday interruptions = greater efficiency!

Kathy Kurz and Jim Scannell are partners in the enrollment management consulting firm Scannell & Kurz. Samantha Veeder, formerly the director of Financial Aid at Hobart and William Smith Colleges (N.Y.), is the firm's senior consultant. They can be reached via their website,

See a companion piece to this column, "10 Rules for a Solid Admissions/Financial Aid Partnership," in the September 2005 issue of University Business. To read it, go to and click on "Back Issues."

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