The Dreaded Collector
Not the role you want to play, right? Who does? We don’t want to be known or seen as the bad guy. We want to be the helpful good guy. Unfortunately today past due collections is part of any business. We all need to get paid for the service we provide.
I am willing to bet if we got to know the individual circumstances of each delinquent account we followed up on we would see some common themes: Bad planning, bad or misunderstood information upfront, change of circumstances and I am sure you could fill in a few more blanks.
In his eBook “A Guide to Managing Delinquency at Your School,” Craig Lockwood, approaches what is a critical issue for many institutions by opening with the metaphor of a tight rope walker deftly attempting to balance the real student with the account receivable. Finding this “delicate balance,” as Lockwood describes, is no easy task.
This high level of past due accounts, in combination with an increase in tuition discounting and the rising demand for a more affordable education, is taking its collective toll on colleges and universities across the country. The problem has reached a crisis point, “managing student account receivables in a prudent and sustainable manner is more important than ever.”
If the delinquency process is an issue at your school, you’ll find this concise ebook an excellent place to start determining a way forward. Craig Lockwood, author of “A Guide to Managing Delinquency at Your School” offers a series of best practices designed to balance the financial needs of your school while taking into account the needs of students and their families. Practices based in large part on the knowledge and experience TMS has had working with corporate clients and client schools alike.
Building on Best Practices
Start with clear expectations - a value proposition that identifies the real world benefits of an education at your institution. Communicate that value proposition. Offer your students and families clear options in language they will understand, and deliver this message using their preferred channel. Lockwood emphasizes the need to “employ different strategies for different populations” as critical to the success of any delinquency process.
Lockwood identifies three distinct populations - inconsistent payers, those with “unmet need” and those who raise the most serious “collection concerns.” He offers strategies for each of these constituencies. Lockwood’s suggestions for improved communications via multiple channels and the need for clarity on bills and statements sent out by your school are both practical and actionable.
If you’re looking for a refresher on regulations, you’ll find them here as well. Lockwood addresses the role, benefits and rules (FERPA) of how to reach out to parents and other sponsors to address instances of delinquency.
While he provides helpful tips on selecting a collection agency, even knowing when to give up on past due account, Lockwood reminds us that “the leverage” your institution has while the student is in attendance far exceeds that of any external agency.” In other words, regardless of how uncomfortable delinquency management may be, your institution is in a far better position to maximize recovery of delinquent student accounts than any external provider.
Lockwood makes the case early on that “students and families that commit to attending your institution have made a material commitment which can often be lost in the euphoria of acceptance.” Clear consistent communication of this obligation and its return on investment to students from the very start could markedly decrease the need for those collection agencies.