2014 minnesota collection network 1 a proven formula for collecting student accounts presented by...

2014 Minnesota Collection Network2014 Minnesota Collection Network11

A Proven Formula for A Proven Formula for Collecting Student Collecting Student

AccountsAccounts

Presented by Clay GoodyearPresented by Clay Goodyear


Contrasting Student Accounts Contrasting Student Accounts and Federal/Institutional Loansand Federal/Institutional Loans

Open line of credit vs. Promissory Open line of credit vs. Promissory notenote

Broad demographics vs. Most Broad demographics vs. Most needyneedy

Variety of repayment resources vs. Variety of repayment resources vs. Limited optionsLimited options


The FormulaThe Formula

A strong conviction, PLUSA strong conviction, PLUS An excellent explanation of the debt, An excellent explanation of the debt,

PLUSPLUS Selling the benefits of repayment, PLUSSelling the benefits of repayment, PLUS Revealing the consequences of non-Revealing the consequences of non-

payment, EQUALSpayment, EQUALS Better Collections (reduced aged Better Collections (reduced aged

receivables)receivables)


A Strong ConvictionA Strong Conviction

Each school bills accounts properly – the Each school bills accounts properly – the debt is owed and the debt will be paiddebt is owed and the debt will be paid

High rates of default negatively affect the High rates of default negatively affect the economyeconomy

Customer service is reserved for Customer service is reserved for consumers who pay their accounts on consumers who pay their accounts on timetime

We must be assertive, even persistent, We must be assertive, even persistent, but never hostilebut never hostile


A Strong ConvictionA Strong Conviction

Conviction can be verbalized by assertive Conviction can be verbalized by assertive language:language:

““This debt must be resolved immediately”This debt must be resolved immediately” ““Debt repayment has a moral and a legal Debt repayment has a moral and a legal

basis – this does not go away”basis – this does not go away” ““Partial payment options are only Partial payment options are only

permitted with guaranteed or electronic permitted with guaranteed or electronic funds”funds”

2014 Minnesota Collection Network2014 Minnesota Collection Network

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An Excellent Explanation of the An Excellent Explanation of the DebtDebt

Student accounts are a function of:Student accounts are a function of: Non-prepaid tuition and fees for a Non-prepaid tuition and fees for a

private schoolprivate school Refunds of grants due to non-Refunds of grants due to non-

performance by the studentperformance by the student Miscellaneous fees incurred after the Miscellaneous fees incurred after the

beginning of the semester beginning of the semester


Selling the Benefits of Selling the Benefits of RepaymentRepayment

More access to education to improve More access to education to improve future employment opportunitiesfuture employment opportunities

The privilege of re-enrollmentThe privilege of re-enrollment Availability of transcripts and diplomasAvailability of transcripts and diplomas Integrity and honor for the benefit of Integrity and honor for the benefit of

the school and the “next student in the school and the “next student in line”line”


Revealing the Consequences of Revealing the Consequences of Non-PaymentNon-Payment

Credit reporting to the three national Credit reporting to the three national bureaus, when it appliesbureaus, when it applies

Referral to outside collection agencies Referral to outside collection agencies and the impact of Borrower Paid and the impact of Borrower Paid Collection CostsCollection Costs

Litigation and execution of judgment, Litigation and execution of judgment, when it applieswhen it applies


Responses to Common Responses to Common DisputesDisputes

Student -- “Financial aid covered all my Student -- “Financial aid covered all my expenses.”expenses.”

““Financial aid could have been removed for Financial aid could have been removed for poor grades or early withdrawal from school. poor grades or early withdrawal from school. If this is the case, you must reimburse the If this is the case, you must reimburse the school for your tuition and fees.”school for your tuition and fees.”

““Financial aid does not always pay 100% of Financial aid does not always pay 100% of a student’s expenses, especially those a student’s expenses, especially those miscellaneous fees incurred after the miscellaneous fees incurred after the semester begins.”semester begins.”



Student -- “I withdrew from school.”Student -- “I withdrew from school.” ““Your responsibility is to provide proof of Your responsibility is to provide proof of

proper withdrawal during the Drop/Add proper withdrawal during the Drop/Add process, and if this is not possible, the process, and if this is not possible, the debt remains your obligation.”debt remains your obligation.”

““Though you registered and did not attend Though you registered and did not attend class, you are still responsible, as no other class, you are still responsible, as no other student was given the opportunity to fill student was given the opportunity to fill the seat allocated to you.”the seat allocated to you.”



Student -- “My parents paid for all of my Student -- “My parents paid for all of my education.”education.”

““There is a balance remaining on your There is a balance remaining on your account, and it is legally your responsibility. account, and it is legally your responsibility. Would you like to talk to your parents about Would you like to talk to your parents about this, or would you like me to talk to them?”this, or would you like me to talk to them?”

““Your parents may not be aware this debt Your parents may not be aware this debt exists. Give me permission to call them, and exists. Give me permission to call them, and if they take care of it now, you will not have if they take care of it now, you will not have to worry about this debt impacting you any to worry about this debt impacting you any further.”further.”


ConclusionConclusion

““Collections is a business transaction Collections is a business transaction not an emotional experience”not an emotional experience”

Give the student a chance to PIF in one Give the student a chance to PIF in one payment – provide suggestionspayment – provide suggestions

Ask not what the student can afford to Ask not what the student can afford to pay, but how long it will take her to PIFpay, but how long it will take her to PIF

Have in mind a minimum monthly Have in mind a minimum monthly payment and be willing to ‘walk away’payment and be willing to ‘walk away’

2014 minnesota collection network 1 a proven formula for collecting student accounts presented by...

Documents

collection costslitigation

outside collection agencies

contrasting student

financial aid

student accountspresented

common disputesstudent

debtstudent accounts

studentmiscellaneous