Why Flexible Payment Plans Are So Important (and Where to Start)
For many, the potential of refunds continues to loom and tuition discounts for distance learning are two financial issues that need to be addressed (if they haven’t already been)
Adjusting payment plan schedules and deadlines is one way for institutions to secure as much revenue as possible – and there are a number of ways they can go about it
By listening to the voices of our customers, we’re able to identify whether issues or opportunities they’re seeing are unique to their institution or something that affects others as well
Why flexibility is important
There was a lot of uncertainty in the 2019-20 academic year. That hasn’t gone away. For incoming freshmen and returning students, gap years, delayed decisions, and living situations are all strong possibilities for upcoming semesters. And with rising COVID-19 cases, the 2020-21 semester isn’t looking much different.
Some institutions are sending students home, delaying spring terms, or planning to end the year early (many at around Thanksgiving). For many, the potential of refunds continues to loom and tuition discounts for distance learning are two financial issues that need to be addressed (if they haven’t already been).
Adjusting payment plan schedules and deadlines is one way for institutions to secure as much revenue as possible – and there are a number of ways they can go about it.
- Offer a variety of schedules. If your institution only offers plans that include two or three payments, consider increasing the number of payments students can spread their bills over throughout the semester.
- Add a second due date. Give students another option to choose as their due date – allowing more flexibility.
- Push spring payment plan start dates back. Give students a little extra time to get their finances in order before they have to start making payments.
- Extend cutoff dates for payment plan enrollment. This allows students more time to enroll in a payment plan, increasing the likelihood their bills are paid in full.
- Review and revise controllable dates. Reconsider dates for things like deposits, adds and drops, late fees, and cancellation dates.
- Create payment plan options for students with outstanding balances. Offering options to students who have past due balances, provides them a way to pay what they owe without being sent to collections, and opens the possibility of the student being able to persist.
Voices of our customers
We rely heavily on client feedback because every institution operates a little bit differently. By listening to the voices of our customers, we’re able to identify whether issues or opportunities they’re seeing are unique to their institution or something that affects others as well.
Then, once those challenges or opportunities have been identified, we brainstorm with the institution we’re working with. When it comes to adjusting payment plan schedules, that means going over all of the options (like the ones above) at our disposal – and keep track of any new ideas along the way.
A mini case study: Johns Hopkins University School of Education
With the challenges that accompanied 2020, Johns Hopkins University School of Education recognized that their current payment plan schedules weren’t going to work. The institution eventually reached out to their Nelnet Campus Commerce customer relationship manager to explore which options would help them improve.
The result? Johns Hopkins had a much more comprehensive set of payment plan options. Before the changes, the institution offered five-payment plans that began Aug. 1 (for fall plans) and Jan. 1 (for spring plans).
After working with us, they revised their plan offerings to offer five, four, and three-payment plans for both terms, introducing multiple enrollment deadlines for each one.
- Fall term deadlines:
- Five, four, or three-payment plans beginning Aug. 1, Sept. 1, or Oct. 1
- Five, four, or three-payment plans beginning Aug. 15, Sept. 15, or Oct. 15
- Spring term deadlines:
- Five, four, or three-payment plans beginning, Jan. 1, Feb. 1, or March 1
- Five, four, or three-payment plans beginning Jan. 15, Feb. 15, or March 15
These plans still offered benefits to those who enrolled in a plan early on, but there was just enough flexibility for students and families who needed a little while to make their financing decisions.
“We’re finding that the new payment plans are very popular with the late-decision students, and would encourage other institutions to look into the same if the opportunity arises,” said Angie Banks-Smith, student account manager at Johns Hopkins University School of Education.
Next steps for higher education institutions
If your institution is considering whether current payment plan schedules work as well as they should, here are a few steps to take. First, review all of your current payment plan offerings – gather as much information as you can before thinking about changes.
Then, decide which changes (if any) could help your institution. Feel free to use the options we provided earlier as a starting point, but don’t be afraid to get creative. While you’re brainstorming, contact your customer relationship manager, client success manager, or account manager to get their thoughts – we’re always happy to help come up with ideas.
Finally, continue to listen to students and families. What issues are they facing? If it was up to them, what would an ideal payment plan experience look like?
By listening, you unlock a world of insights that are incredibly powerful.
This article was based on a Nelnet Campus Commerce webinar – want to check it out? Watch the full video (and get a bonus section with Q&As)!