Student Accounts Receivable – Tuition Revenue Cycle Table of

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FINANCE AND
PLANNING
Student
Receivables
Student Accounts Receivable – Tuition Revenue Cycle
Table of Contents
01. Policy and Procedure Statement ............................................................................................... 2
02. Reason for Policy ...................................................................................................................... 2
03. Who Needs to Know This Policy ............................................................................................... 2
04. Legal Obligations ....................................................................................................................... 2
05. Explanation of Policy and Procedure ........................................................................................ 2
06. Responsibilities of the Collections Dept. ................................................................................... 3
07. Responsibilities of Students ...................................................................................................... 3
08. Responsibilities of the Registrar ................................................................................................ 3
09. Responsibilities of Other Departments ...................................................................................... 3
10. Billing and Collection Procedure ............................................................................................... 3
11. Collection Agency Policy & Procedures .................................................................................... 4
12. Accounts Receivable Write-Off Procedures .............................................................................. 5
13. Reserve Policy ........................................................................................................................... 5
14. Accounts Receivable Aging and Reconciliation to General Ledger ........................................... 5
15. Collection Process Flowchart .................................................................................................... 6
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01. Policy and Procedure Statement
This document covers the key policies and procedures governing the recording, collection,
analysis and reporting of student accounts receivable.
02. Reason for Policy
A student is responsible for the payment of charges incurred at the university by the stated
payment deadline. The purpose of this policy is to detail the specific process and action steps to
be used to resolve any outstanding student account balance.
03. Who Needs to Know This Policy
The Collection Department, members of the Office of Student Assistance, Admissions staff,
academic advisors and anyone else who comes in contact with students in an advisory capacity.
04. Legal Obligations
The university is entitled to collect all earned revenues and to pass on the costs of these
collection efforts to the student. The communication of this fact must be presented in as many
places as possible, to ensure students are aware of their obligation and the consequences for
non-payment.
05. Explanation of Policy and Procedure
During the normal course of events, once a payment due date has been missed, past due notices
will be sent to students, typically on monthly intervals. If the balance remains unpaid, the student
may not return for subsequent semesters and the account will be transferred to the Pace
Collections Department. This department will then attempt to reach the student to arrange
payment of the debt. It is the responsibility of the student to make sure the address Pace
has on file is their current address.
Delinquent outstanding balances, including those from installment payment plans and unpaid
fines, are subject to collection by the University or, at the University’s option, its designated agent.
Late charges and interest may be added to a delinquent outstanding balance. In addition, the
actual collection expenses, including attorneys’ fees, if any, incurred by the University will be
added to the delinquent outstanding balance.
Any student who has a delinquent outstanding balance is not eligible to enroll at the University.
The University will not provide copies of transcripts to or on behalf of any student with a
delinquent outstanding balance. A delinquent outstanding balance will be reported to all
national credit bureaus once it is sent to a collection agency and may significantly and
adversely affect the student’s credit history. The University may pursue legal action to recover
the amount of the delinquent outstanding balance plus any late charges, interest, actual collection
expenses, court costs, and attorneys’ fees.
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06. Responsibilities of the Collections Dept.
The Collections Dept. has a responsibility to:

Maintain a list of delinquent outstanding balances, and attempt to contact the student
about making payment arrangements. In addition, place appropriate holds on the account
to prevent the issuance of transcripts or future registrations.

Upon contact, inform students of their delinquency, the amount due, and the
consequences which may result from non-payment of outstanding amounts – namely,
transference of the balance to a third party collection agency. At which time, national
credit bureaus will begin to be informed each month of the status of the student’s bad
debt.

When appropriate, allow the third party agency to initiate a legal action for recovery.
07. Responsibilities of Students
Students are expected to keep their accounts current. Students must also notify the school each
time there is a change in their address. If a student account is sent to the collection department it
is very important that the student at least reply in order to begin a dialogue on the resolution of
the account balance. Ignoring attempts for contact will only result in the account being sent to a
third party collection agency, where the collection costs of as much as 33% of the amount owed
will be added. Once an account goes to a collection agency, it will not be retracted.
08. Responsibilities of the Registrar
The Registrar is to report all delinquent tuitions and fees, including fines, to Collections. In
addition, the Registrar is responsible to work in conjunction with the collections office by ensuring
the enrollment of students and the transmission of transcripts adhere to this policy as described
below.

Any student who has a delinquent outstanding balance is not eligible to enroll at the
University.

The University will not provide copies of transcripts to or on behalf of any student with a
delinquent outstanding balance.
OSA, in consultation with Finance, can make exceptions based on certain amounts or special
circumstances.
09. Responsibilities of Other Departments
All departments that may have outstanding incidental student balances, such as library fines,
parking tickets, material fees, book sales, and meal plans, are responsible for reporting unpaid
fines to the Registrar’s Office for inclusion in student billing.
10. Billing and Collection Procedure
The following steps are followed in collecting student accounts receivable:
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1. The student completes the enrollment process including financial aid packaging
2. The student registers and is asked to pay 100% of the balance due by the tuition due
date. This means early August for the fall term and early January for spring. If
necessary, a payment plan may be established with Tuition Pay (as administered
through Sallie Mae).
3. Student tuition and fee invoices are mailed to students who complete early registration at
least 30 days prior to the due date. Students who complete registration late are required
to pay the balance in full prior to the start of the semester.
4. If payments have not been received by the semester void date, usually within 2 to 4
weeks of the start of the semester, the Office of Student Assistance (OSA) voids the
registration of any student who has not paid their tuition balance in full. However, each
semester there are certain groups OSA protects from being included in the void for
various reasons (i.e. certain balance thresholds). There is a one week period after the
void during which the student can reverse this transaction by paying their balance in full.
5. Once the void is entered in the system, OSA begins the process of sending out past due
billing notices for all open balances.
6. OSA past due billings continue until a CO hold is placed on the account and the account
has been placed with an outside collection agency.
7. The internal collections department efforts begin approximately 10 months after payment
due date. A second letter is sent in month 11 and a third letter is sent in month 12. The
student is given 15 days after the third letter before action is taken. If payment is not
received, the balance is deemed uncollectible by Pace University and the amount is
given to a collection agency for further action and then written-off after about 2 months.
Refer to #.15- Collection Process Flowchart
11. Collection Agency Policy & Procedures
The university uses outside collection agencies to pursue all student account balances
outstanding for more than 150 days. The collection agency retains the placement indefinitely and
continues to credit report until such time as we request the account be closed and returned.
Once an account is placed with an outside collection agency, an inquiring student should be
referred by Pace staff to the Pace internal collections office first for questions regarding the
repayment of their balance. The student will then be referred to the appropriate person at the
collection agency to discuss their account further. Pace staff should be available to answer
questions regarding the outstanding balance due but all payments should be mailed directly to
the collection agency. Once the account has been given to the collection agency, no payments
should be accepted by Pace staff.
The fee a collection agency charges is by definition, expressed as a percentage of anything they
collect on behalf of the University. The University, having given the students ample opportunity to
repay their balances, directs any collection agency to remit to the University 100% of any balance
owed to the University which is placed with them. This means the collection agency fees must be
added to the balance the student owes.
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12. Accounts Receivable Write-Off Procedures
Approximately two months after an account has been placed with a collection agency, the
account is written off if no payment is received. When the list of students is prepared for the
collection agency, the Tuition Collections Specialist presents the list to the Assistant Controller –
rd
Tuition Revenue Cycle for approval. This approval is for both the transfer to a 3 party collection
agency and the subsequent write-off.
Any amounts collected by a collection agency are accounted for as follows: the collection agency
st
keeps their agency fee and remits to the university the remaining balance. When a 1 payment
has been received, the entire balance originally written off is written back on as a receivable at
the time of payment.
13. Reserve Policy
An allowance for doubtful accounts is an account established to record a reduction for accounts
receivable balances, to allow for those accounts that will not be collected. The reserves are
established when there is a basis to doubt the full collection of amounts due. The adequacy of
reserves is evaluated each year as part of the year-end closing process and also at mid-year.
The method for calculation of the reserve allowance is based on account aging and related
estimated collection percentages and is compared to historical write-off averages for
reasonableness. The goal is to properly and accurately present the accounts receivable balance.
14. Accounts Receivable Aging and Reconciliation to General Ledger
Each day the Accounts Receivable Aging Report is produced and stored on a shared drive for
use by the Assistant Controller – Tuition Revenue Cycle. The total on this aging can be tied in to
the total debits on the Trial Balance Report (credit balances are not considered as part of the
aging). The Accounts Receivable reconciliation is performed several times per month. The
Banner report for viewing an individual student ledger is TSAAREV. In that, you may search for a
student by Banner ID, name, or SSN.
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15. Collection Process Flowchart
PP = Payment Plan
PP established
(10, 8, or 5 pay) or
balance in full due
Does student make
payment(s)?
Y
End
Student disputes
balance, we
research validity of
claim
Y
Valid claim?
Y
Adjust balance
End
N
5-6 mo’s after
semester ends,
accounts identified
for collection
Collection hold
(CT) placed and
1st in-house
collection letter
mailed
Do they
respond?
End
N
N
Send out letter #2
Student pays
balance in full
Y
Make in-house PP
or remit next AMS
payment
Y
Do they
respond?
Student pays
balance in full
Y
Do they make
payments?
Y
End
N
End
Y
N
Do they make
payments?
Make in-house PP
Y
Send out letter #3
marked with red
‘Urgent” stamp
Y
N
Student pays
balance in full
End
Send out Final
notice letter
marked with red
“Urgent” stamp
Do they
respond?
N
Place acct with
agency. Place CO
hold, then w/o as
bad debt
Did they pay?
Reverse
W/O
Y
N
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Will eventually find
another agency to
place account with
for 2nd collections
End
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