2014 Minnesota Collection Network 1 A Proven Formula for Collecting Student Accounts Presented by Clay Goodyear

2014 Minnesota Collection Network 2 Contrasting Student Accounts and Federal/Institutional Loans Open line of credit vs. Promissory note Open line of credit vs. Promissory note Broad demographics vs. Most needy Broad demographics vs. Most needy Variety of repayment resources vs. Limited options Variety of repayment resources vs. Limited options

2014 Minnesota Collection Network 3 The Formula A strong conviction, PLUS A strong conviction, PLUS An excellent explanation of the debt, PLUS An excellent explanation of the debt, PLUS Selling the benefits of repayment, PLUS Selling the benefits of repayment, PLUS Revealing the consequences of non- payment, EQUALS Revealing the consequences of non- payment, EQUALS Better Collections (reduced aged receivables) Better Collections (reduced aged receivables)

2014 Minnesota Collection Network 4 A Strong Conviction Each school bills accounts properly – the debt is owed and the debt will be paid Each school bills accounts properly – the debt is owed and the debt will be paid High rates of default negatively affect the economy High rates of default negatively affect the economy Customer service is reserved for consumers who pay their accounts on time Customer service is reserved for consumers who pay their accounts on time We must be assertive, even persistent, but never hostile We must be assertive, even persistent, but never hostile

2014 Minnesota Collection Network 5 A Strong Conviction Conviction can be verbalized by assertive language: “This debt must be resolved immediately” “This debt must be resolved immediately” “Debt repayment has a moral and a legal basis – this does not go away” “Debt repayment has a moral and a legal basis – this does not go away” “Partial payment options are only permitted with guaranteed or electronic funds” “Partial payment options are only permitted with guaranteed or electronic funds”

2014 Minnesota Collection Network 6 An Excellent Explanation of the Debt Student accounts are a function of: Non-prepaid tuition and fees for a private school Non-prepaid tuition and fees for a private school Refunds of grants due to non-performance by the student Refunds of grants due to non-performance by the student Miscellaneous fees incurred after the beginning of the semester Miscellaneous fees incurred after the beginning of the semester

2014 Minnesota Collection Network 7 Selling the Benefits of Repayment More access to education to improve future employment opportunities More access to education to improve future employment opportunities The privilege of re-enrollment The privilege of re-enrollment Availability of transcripts and diplomas Availability of transcripts and diplomas Integrity and honor for the benefit of the school and the “next student in line” Integrity and honor for the benefit of the school and the “next student in line”

2014 Minnesota Collection Network 8 Revealing the Consequences of Non-Payment Credit reporting to the three national bureaus, when it applies Credit reporting to the three national bureaus, when it applies Referral to outside collection agencies and the impact of Borrower Paid Collection Costs Referral to outside collection agencies and the impact of Borrower Paid Collection Costs Litigation and execution of judgment, when it applies Litigation and execution of judgment, when it applies

2014 Minnesota Collection Network 9 Responses to Common Disputes Student -- “Financial aid covered all my expenses.” “Financial aid could have been removed for poor grades or early withdrawal from school. If this is the case, you must reimburse the school for your tuition and fees.” “Financial aid could have been removed for poor grades or early withdrawal from school. If this is the case, you must reimburse the school for your tuition and fees.” “Financial aid does not always pay 100% of a student’s expenses, especially those miscellaneous fees incurred after the semester begins.” “Financial aid does not always pay 100% of a student’s expenses, especially those miscellaneous fees incurred after the semester begins.”

2014 Minnesota Collection Network 10 Responses to Common Disputes Student -- “I withdrew from school.” “Your responsibility is to provide proof of proper withdrawal during the Drop/Add process, and if this is not possible, the debt remains your obligation.” “Your responsibility is to provide proof of proper withdrawal during the Drop/Add process, and if this is not possible, the debt remains your obligation.” “Though you registered and did not attend class, you are still responsible, as no other student was given the opportunity to fill the seat allocated to you.” “Though you registered and did not attend class, you are still responsible, as no other student was given the opportunity to fill the seat allocated to you.”

2014 Minnesota Collection Network 11 Responses to Common Disputes Student -- “My parents paid for all of my education.” “There is a balance remaining on your account, and it is legally your responsibility. Would you like to talk to your parents about this, or would you like me to talk to them?” “There is a balance remaining on your account, and it is legally your responsibility. Would you like to talk to your parents about this, or would you like me to talk to them?” “Your parents may not be aware this debt exists. Give me permission to call them, and if they take care of it now, you will not have to worry about this debt impacting you any further.” “Your parents may not be aware this debt exists. Give me permission to call them, and if they take care of it now, you will not have to worry about this debt impacting you any further.”

2014 Minnesota Collection Network 12 Conclusion “Collections is a business transaction not an emotional experience” “Collections is a business transaction not an emotional experience” Give the student a chance to PIF in one payment – provide suggestions Give the student a chance to PIF in one payment – provide suggestions Ask not what the student can afford to pay, but how long it will take her to PIF Ask not what the student can afford to pay, but how long it will take her to PIF Have in mind a minimum monthly payment and be willing to ‘walk away’ Have in mind a minimum monthly payment and be willing to ‘walk away’