Past Due Payment Plans at Indiana University

Indiana University staff and students needed a new option. Processing $2 billion of annual receivables for 95,000 students can be quite the undertaking. What made things tougher was when some of those students started falling behind on monthly payments. The program the university was using to help students catch up was confusing and ineffective, and the institution didn’t want to send students to collections.

Brittany Hubbard, associate treasurer and university bursar, knew the campus was ready for a change, and her 19 years of university experience told her Nelnet Campus Commerce had the solution.

To help students avoid becoming past due, the university offered students a Personal Deferment Option (PDO). Technically, the PDO wasn’t a catch-up payment plan — students would pay a smaller fee to defer their balance rather than taking steps to pay it off.

The name “Personal Deferment Option” also didn’t seem to make sense to many students. At least functionally, the PDO simultaneously was — and wasn’t — a payment plan.

As Brittany said, “A payment plan by any other name is just confusing.”

Once an account became past due, students lost the opportunity to set up a PDO and were typically entered into Indiana University’s earliest version of past due payment plans. These plans were processed manually. To add to the confusion, the university’s billing system still sent out a bill each month.

Indiana University’s collectors would send letters and call to tell the student to disregard the bill and remind them of the payment they needed to make. This manual process was all done with paper calendars and paper promissory notes — and it clearly was inefficient and confusing to the students who experienced it.

When Indiana University moved from a manual to an automated collections process it helped — but it still wasn’t enough.

Nelnet Campus Commerce had been processing the university’s payment plans, and it had been going well. Brittany talked to the Nelnet team about a past-due option and discovered Nelnet Campus Commerce’s Past Due Payment Plans.

The Past Due Payment Plans integrated easily with Nelnet’s payment system that the students were already using. Plus, if a student started falling behind, they would be automatically notified and offered options to catch up. The university didn’t have to dedicate staff to track down students or make a series of payment adjustments manually.

Like every Nelnet Campus Commerce solution, implementation of the Past Due Payment Plans followed a customized step-by-step process for the university. Brittany and her team had direct access to the Nelnet Campus Commerce team and an integration manager who specialized in the institution’s ERP, PeopleSoft 9.2.

Before Nelnet’s solution, past-due students weren’t able to access their accounts. To regain access, students had to pay the entire past-due balance and the minimum monthly payment. That meant the financial office had to spend valuable time manually supporting these students.

With Nelnet’s Past Due Payment Plans, students could take action on their own without ever stepping into an office — freeing up valuable time for Brittany’s team.

Students found the new system easy to use. Without the university doing any advertising, students began enrolling the very first month Nelnet’s Past Due Payment Plans were available.

From February to November 2019, Indiana University had 1,309 past due payment plans and processed more than $1.4 million. That was revenue that would have been greatly reduced if the university had gone with a collection agency.

Past Due Payment Plans are far easier to manage than the manual payment plans the institution previously used. There’s no risk to the institution, and students are able to remain enrolled.

“My goal is for everybody to pay what they owe on the day that it’s due — online, through ACH, and nothing bounces,” said Brittany. “However, this Past Due Payment Plan is to help families that need it. If we can prevent a family from having to take an additional PLUS loan or private loan by offering them this low-cost payment plan, that’s the benefit.”

Want to learn more about Past Due Payment Plans? Find more information here.