Managing Receivables During a Pandemic

For many higher ed institutions, the impact of the pandemic is still being felt – even after nearly a full academic year and a half. At the start of the pandemic, in March 2020, institutions made large investments in updating infrastructure, policies, and procedures. Resources were rearranged to accommodate the needs of students, dates of terms were moved, and schools were left on alert for the next wave of uncertainty. Even before the pandemic hit, many institutions struggled to maintain enrollment numbers needed to support their operations due to shifts in demographics.

With all of this in mind, Nelnet Campus Commerce hosted a webinar, “Managing Receivables During a Pandemic” with Customer Relationship Managers Cindy Cunningham and Damon Magiera, and two special guests from partnering intuitions.

In this webinar, they discussed how institutions reacted at the start of COVID-19, what schools have done to help their enrollment numbers, and some tactics to help manage the increase in receivables. Crystal Pittman, senior accountant from Piedmont Technical College, and Melissa Mahoney, accounting and compliance manager at Richard Bland College, both shared how their campuses were affected, what their institutions are doing to help students, and plans for the upcoming terms.

Nelnet Campus Commerce has the honor of working with over 1,300 higher ed institutions. This past year we have seen and heard of several adjustments our client partners have made recently. Some of these changes include:

• Pushing back start dates of semesters, which often had a trickle-down effect: Late billing dates resulted in later tuition due dates.
• Changing processes, like adding additional payment plans and payment due dates (which gave students more flexibility).
• Extending the duration of payment plans and revising tuition plans to allow students with account balances to still enroll in future terms.
• Holding off on turning past-due students over to a collection agency.

According to Cindy Cunningham, taking care of the financial needs of an institution while addressing the needs of their students is a true balancing act. “What we know is each institution has made changes to meet their own unique needs and requirements,” she explained.

Also, Cindy shared some of the most common requests from our higher ed partners. Things like:

• Changing payment plan start and end dates as school term timelines have evolved
• Extending duration of payment plans so students could lower their payments and pay over a longer period of time
• Allowing payers to change payment due dates
• Suspending plan termination policy
• Switching from a service fee model to a discount fee model and vice versa

“As a company, Nelnet Campus Commerce has been flexible, adapting to our clients’ needs in this crazy, unpredictable time,” Cindy said.

Crystal Pittman, senior accountant at Piedmont Technical College (PTC), shared that in Spring 2020 her institution waived all outstanding student balances, except for students that had return of aid. This helped their students move on to the summer 2020 term. She said that even if students had a prior term balance, they were still encouraged to enroll in upcoming semesters.

A few things PTC did was suspend registration/late fees for all students, processing a drop for non-payment of tuition and fees related to current term balances in the summer of 2020. (Whether this will remain in place for Fall 2021 is yet to be determined.) This only applied to students who had not completed their FASFA and who were not meeting their satisfactory process. According to Crystal, this caused a lot of extra debt.

To address past-due students, PTC has a rigorous debt collection letter process. This process alerts the student of their outstanding balance and lasts for one year before going to the South Carolina Department of Revenue’s Debt Set-Off Program, which uses the student’s tax refund to pay the tuition debt back to the college. Also, PTC puts a hold on delinquent student accounts. This still show grades in their system, but will prevent transcripts from being formally released until the balance is paid.

Students at PTC can pay a prior term balance with the next term’s financial aid or <with a payment plan>. PTC has been a Nelnet partner since 2008 and uses prior term balance payment plans in 3, 6, 9, and 12-month plans. The student either pays a $60 down payment or 10% of the balance. “We felt by giving the student a down payment option, it would give them the feeling of ownership in the plan,” said Crystal.

Melissa Mahoney, accounting and compliance manager from Richard Bland College (RBC) shared how her institution has managed receivables during the pandemic. Melissa explained RBC closed their physical campus in late March 2020 and went to all virtual learning. Due to this closure, they gave out student rebates for housing and meal plans since students didn’t get to use what they had while on campus. “These rebates were funded by the CARES Act from the federal government. The funds also assisted students who had account delinquency, which we would usually freeze their accounts to registering for classes and receiving their transcripts,” Melissa explained.

Also, RBC received federal funding grants which they used for student financial aid. All of this funding led the school to process hundreds and hundreds of refunds to students during the Spring 2020 semester. This was a very time-consuming process as, at that time, all refunds were processed in house with printed, paper checks. This led RBC to partner with Nelnet in Summer 2020 to roll out a <new refund platform>. By getting students to sign up for ACH refunds, they could receive their payments much faster.

At RBC, all summer and most of Fall 2020 classes became virtual, so they implemented a lower online course fee to help students continue to enroll at a lower cost. This also helped keep the receivables down since they weren’t charging as much for enrollment. Along with the lower online course fee, late fees for the fall semester were waived and start dates of classes and tuition due dates for Fall 2020 and Spring 2021 were pushed back.

Now, when a student is classified as “delinquent”, they have until the end of the semester to satisfy their balance. With this, RBC has seen an increase in time it takes to clear off receivables, which can have an effect on cash flow. By implementing payment plans, RBC is hopeful they will be able to help students pay who are no longer enrolled and will no longer send students to collections, which they were doing once an account was 90 days past due.

These stories give just a glimpse of what institutions are doing to manage (and evolve) accounts receivable. Both of our guests said Payment Plans have been a useful tool for everyone – from the institutions themselves, to the students they serve. A win-win for everyone. Payment plans, either prior term or past due, are a great way to help students stay enrolled, avoid extra fees, and stay on track for graduations (plus, they reduce collection costs for your school).

Want to watch the webinar? Check out the on-demand version. You can also learn more about Nelnet Payment Plans here.