1. 1 COLLECTING STUDENT ACCOUNTS MASFSA Michigan Association for Student Financial Service Administrators Shelia Stewart, Wayne State University And Karen Reddick, National Credit Management

2. Since 1960 2 SANDBOX RULES This session is open forum Audience participation is encouraged Questions and comments are welcome throughout the presentation

3. Since 1960 3 TYPES OF STUDENT DEBT AT WSU TUITION & FEES RETURNED FINANCIAL AID INSTITUTIONAL LOANS ROOM & BOARD

4. Since 1960 4 GETTING INFORMATION Registration (Before Debt Occurs) - Name - Local Address - Local Phone Numbers - Permanent Address and Phone Number - Social Security Number - Birth Dates - References * Alternates other than parents * Be aware of info provided including address and phone numbers - Student e-mail address and cell phone number - Spouse Information

5. Since 1960 5 DISCLOSURE OF INFORMATION What to Disclose: – Assessing Collection Cost – Late Charges and/or Interest Charges – Drop and Withdrawal Policy – Consequences of Missing Payment

6. Since 1960 6 DISCLOSURE OF INFORMATION Ways To Disclose Information: – Promissory Notes – Truth/Lending Statements – Financial Aid Award Letters – Website & Telephone Registration Financial Responsibility Statement with electronic signature – Registration Forms – Payment Plan Terms of Agreement – Catalogs and Handbooks Policies and Procedures Drop and Add Policy Withdrawal Policy Return of Title IV Funding – Admission Forms

7. Since 1960 7 ADDING COLLECTION AND ADDITIONAL FEES CATALOGS/HANDBOOKS – Signature agreeing to rules and guidelines PROMISSORY NOTES – Signed – Bankruptcy Verbiage (Educational Loan) WEBSITE & TELEPHONE – Personal Identification Number – Agree to statement pertaining to addition of collection cost before continuing with registration

8. Since 1960 8

9. 9 MAKE IT EASY TO PAY Types of Payments: – Credit Cards – Checks – ACH – Wire Transfers – Checks Over the Phone – Western Union

10. Since 1960 10 MAKE IT EASY CONTACT Concise Statements – Provide Complete Information Contact Person Phone Number Toll Free Number Fax Number Address Email Self Addressed Envelope Website Access to Account Info –Secure PIN –Ability Pay On-Line (single & monthly payments) –View Payment History –View Account History

11. Since 1960 11 WSU COLLECTIONS Final Demand Bill – Issued at the end of the semester Informed of Collection Costs 10 days to Pay or Payment Agreement Accounts Forwarded to a Collection Agency – Pre-collect Period of 45 days Past Due Letters –30 Day and 15 Day

12. Since 1960 12 DELINQUENT STUDENT ACCOUNTS Effective letters – Create an urgency – 3 C’s Clear Complete Concise

13. Since 1960 13 COLLECTION CALLS One attempt after each letter sent – Identify Borrower – Identify Yourself – Request Payment in Full Listen to what the borrower has to say. – Determine Problem – Determine Solution – Close the Deal – Update the File

14. Since 1960 14 MISSING IN ACTION Skip tracing - Let the Web Work For You Free Websites - Google - White Pages - Skip Ease Paid Websites - Accurint -Merlin -Alumni Finder Credit Bureaus - Experian - Trans Union - Equifax

15. Since 1960 15 Students vs. Non-Students Students – Drop from classes – Cut off Meal Plans – Remove from Residence Halls – Hold Transcripts – Hold on Registrations and all Services Non-Students – Hold Transcripts & Diploma – Hold on Registrations – Report to Credit Bureaus – Collection Agencies

16. Since 1960 16 PLACING WITH AGENCIES TOOLS TO HELP IN COLLECTIONS – Place at 120 - 180 Days or less – Collection Cost – Reporting to Credit Bureaus – Litigate – Provide all information available –Prom Notes –Registration Forms –Reference Sheets –Web Registration –Admission Forms

17. Since 1960 17 FEDERAL AND STATE LAWS STATE/FEDERAL LAWS – REGULATES CREDITORS COLLECTING DEBT INCLUDING 3 RD PARTIES FAIR DEBT COLLECTION PRACTICE ACT (FDCPA) – REGULATIONS GOVERNING ONLY 3 RD PARTIES Bankruptcy Abuse Prevention and Consumer Act of 2005 (BAPCA) – Expanded definition of student loans for purposes of sections 523(a)(8) exception to discharge. – Adds qualified educational loans as defined under section 221 of Internal Revenue Code to those educational loans currently considered to be non-dischargeable. (Including tuition, books fees, etc.)

18. Since 1960 18 FDCPA PROVISIONS MICHIGAN A licensee shall not commit any of the following acts: demanding or obtaining a share of the compensation for service performed by an attorney in collecting a claim or demand or collecting or receiving a fee or other compensation for service performed by an attorney in collecting a claim or demand or collecting or receiving a fee or other compensation from a consumer for collecting a claim, other than a claim owing the creditor pursuant to the provisions of the original agreement between the creditor and debtor. STATES WITH NO PROVISIONS ALABAMA ALASKA FLORIDA KENTUCKY MARYLAND MONTANA OHIO OKLAHOMA RHODE ISLAND SOUTH DAKOTA UTAH

19. Since 1960 19 FDCPA GENERAL RULE THE ADDITION OF ANY INTEREST, SERVICES FEES, COLLECTION COSTS OR OTHER EXPENSES INCIDENTIAL TO THE ORIGINAL DEBT IS PERMITTED WHEN “SUCH AMOUNT” IS EXPRESSLY AUTHORIZED BY THE AGREEMENT CREATING THE DEBT OR PERMITTED BY LAW.

20. Since 1960 20 PLACING WITH AGENCY – Electronic Secure Website Email Excel File Webfolder FTP Billing Service – Manual Print Screens Placement Forms

21. Since 1960 21 INFO NEEDED WHEN PLACING ACCOUNTS Required Information –Name –Phone Number –Address –Social Security Number –Delinquency Date Required by FCRA to report to Credit Bureaus Additional Helpful Information –Date of Birth –Balance Breakdown Principal Late Charges/Collection Cost Interest –Place of Employment –References –Date of Last Payment –Break Down of Charges –Co-Signers Information

22. Since 1960 22 CLIENT HISTORY LOCATION TYPES OF STUDY DEMOGRAPHICS OF STUDENTS TYPES OF DEBTS POLICY AND PROCEDURES –DROP/WITHDRAWAL POLICIES –RETURN OF FINANCIAL AID

23. Since 1960 23 COLLECTION AGENCY ACTIVITY INITIAL COLLECTION LETTERS CREDIT BUREAU REPORTING PHONE CONTACTS VERIFY INFORMATION SKIP TRACING DEBT RESOLUTION ABILITY TO PAY MAKE DECISION

24. Since 1960 24 AGENCY COLLECTION LETTERS All letters approved by FDCPA Attorneys Identify School and Agency Rights of Student Per FDCPA Identify Debt

25. Since 1960 25 CREDIT REPORTING 45 DAYS 7 Years for Reporting (Different from actual statue of limitation in the state which is 6 years) 3 MAIN CREDIT BUREAUS – EXPERIAN – EQUIFAX – TRANS UNION

26. Since 1960 26 AGENCY PHONE CONTACT VERIFY SPEAKING WITH BORROWER IDENTIFY YOURSELF AND CLIENT BEING REPRESENTED VERIFY/OBTAIN INFORMATION – EMPLOYMENT – PHONE NUMBER – CELL PHONE – ADDRESS – E-MAIL

27. Since 1960 27 AGENCY PHONE CONTACT Debt Resolution – Ability to Pay – Pay in Full – Monthly Payments – Family – Loans – Follow up From Missed Payments

28. Since 1960 28 Skip Tracing Credit Reports – Review Credit History – Demographics – Employment – Contact Trade Lines – Determine Ability to Pay Websites Accurint Merlin Alumni Finder Google Skipease White Pages Teacher Locators Doctor/Attorney Locators Professionals Locators Asset/Property Locators Deceased Military Locators

29. Since 1960 29 LITIGATION Good Candidate – Review Credit Report Liens Other prior judgments Employment History – Are there any Assets? Know Your State Statutes – What you can and can not do – Statute of Limitations 6 years in Michigan – Ability to Collect With or Without Agreement

30. Since 1960 30 CONTACT INFORMATION Karen Reddick 800-627-2300, 229 Kreddick@ncmstl.com Shelia Stewart 313-577-5122 sheliastewart@wayne.edu FDCPA Regulations www.acainternational.org