Our recent eBook, A Guide to Managing Delinquency At Your School, discusses the fact that one of the best payment collection rates for consumer services is found in the cell phone market.
With all the extended credit and different types of service providers out there, what is the cell phone market doing RIGHT in order to collect on payment?
The answer is fairly simple. They are applying pressure on their “lever” at exactly the crucial point in the fulcrum. In other words- they are taking away access to what the consumer wants most of all – their cell phone service- in order to collect on their debt. In today’s environment, you would be hard pressed to find anyone that doesn’t use their cell phone as their life line to the world. We use it to pay bills, check on our investments, keep track of appointments, answer emails, text, and sometimes, even to make phone calls! Take that access away, and our world stops spinning pretty quickly. If payment restores that balance for us, payment will usually follow suspended service fairly quickly.
How can that same principle be applied to collecting balances at your school?
In many ways! Your “lever” is longer than you may think, and applying pressure to it at the right points in the payment process may help the student/payer understand the importance of the payment contract they have entered into as an enrollee of your school.
No matter how uncomfortable delinquency management may be, the fact remains - you need to get paid in order to continue to provide services to your students. The student and payer have been made aware early in the process that higher education comes with a price tag attached, and that payment is due for services rendered (in this case, services being education, living arrangements, meal plans, etc.).
Some points in the payment process which can help get the attention of the student/payer (and result in payment!) include:
- Withholding dorm access: (keys, etc.) until payment obligations are met. Driving up to campus with a car load of clothes, bedding, and personal items only to be denied access to a dorm room is a pretty big attention-getting moment.
- Placing holds on meal plans: Students who visit the dining facilities at your school only to be told their meal plan is on hold pending payment are likely to make payment arrangements ASAP. (Even college students can only eat SO many Ramen noodles.)
- Registration holds: Trying to register for the classes needed to meet program requirements is a big moment for students. Restricting access to registration means classes may fill up before the student has had a chance to register and may delay their educational game plan. Holds encourage the student/payer to call the school and make arrangements for payment.
- Transcript and grade holds: This can be particularly effective for students that no longer attend your institution but would like to receive credit for coursework completed in order to either further their education or find gainful employment.
- Housing lotteries: Let’s face it, student housing is a lot nicer than it used to be and many schools hold housing lotteries to determine who gets first crack at the sweetest accommodations. Requiring payment to participate can be effective motivation for the location motivated.
- Parking permits: At some campuses parking is limited so having that “golden ticket” or parking permit in your windshield can be viewed as very valuable. Not to mention the cost of not having a parking permit and accumulating parking fines. This requires working closely with the permit issuing department, but can be another very effective lever.
While not every scenario will result in full payment in that moment, it will many times spark a conversation between the payer and the school, which is a great first step that can lead to payment, or plans for payments. These conversations can also help your school understand the need of the payer, as well as which category of payer they fall into (inconsistent payer, unmet need, collection concern), assisting you in determining the appropriate next steps.
To learn more about managing delinquency at your school including setting expectations, employing the right strategies for the right payers, and maximizing on collections, take advantage of our free eBook, A Guide to Managing Delinquency At Your School.