1

COLLECTING STUDENT ACCOUNTSCOLLECTING STUDENT ACCOUNTS

MASFSA

Michigan Association for Student Financial Service Administrators

Shelia Stewart, Wayne State University And

Karen Reddick, National Credit Management

2Since 1960

SANDBOX RULESSANDBOX RULES

This session is open forum

Audience participation is encouraged

Questions and comments are welcome throughout the presentation

3Since 1960

TYPES OF STUDENT DEBT TYPES OF STUDENT DEBT AT WSUAT WSU

TUITION & FEESRETURNED FINANCIAL AIDINSTITUTIONAL LOANSROOM & BOARD

4Since 1960

GETTING INFORMATIONGETTING 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

5Since 1960

DISCLOSURE OF DISCLOSURE OF INFORMATIONINFORMATION

What to Disclose:

– Assessing Collection Cost

– Late Charges and/or Interest Charges

– Drop and Withdrawal Policy

– Consequences of Missing Payment

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DISCLOSURE OF INFORMATIONDISCLOSURE 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

7Since 1960

ADDING COLLECTION ADDING COLLECTION AND ADDITIONAL FEESAND 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

8Since 1960

9Since 1960

MAKE IT EASY TO PAYMAKE IT EASY TO PAY

Types of Payments:

– Credit Cards– Checks– ACH– Wire Transfers– Checks Over the Phone– Western Union

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MAKE IT EASY CONTACTMAKE 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

11Since 1960

WSU COLLECTIONSWSU 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

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DELINQUENT STUDENT DELINQUENT STUDENT ACCOUNTSACCOUNTS

Effective letters– Create an urgency– 3 C’s

Clear Complete Concise

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COLLECTION CALLSCOLLECTION 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

14Since 1960

MISSING IN ACTIONMISSING 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

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Students vs. Non-StudentsStudents 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

16Since 1960

PLACING WITH AGENCIESPLACING 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

17Since 1960

FEDERAL AND STATE FEDERAL AND STATE LAWSLAWS

STATE/FEDERAL LAWS– REGULATES CREDITORS COLLECTING DEBT INCLUDING 3RD

PARTIES

FAIR DEBT COLLECTION PRACTICE ACT (FDCPA)– REGULATIONS GOVERNING ONLY 3RD 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.)

18Since 1960

FDCPA PROVISIONSFDCPA PROVISIONSMICHIGAN

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

ALASKAFLORIDA

KENTUCKYMARYLANDMONTANA

OHIOOKLAHOMA

RHODE ISLANDSOUTH DAKOTA

UTAH

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FDCPA GENERAL RULEFDCPA 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.

20Since 1960

PLACING WITH AGENCYPLACING WITH AGENCY– Electronic

Secure WebsiteEmail Excel FileWebfolderFTPBilling Service

– ManualPrint ScreensPlacement Forms

21Since 1960

INFO NEEDEDINFO NEEDEDWHEN PLACING ACCOUNTSWHEN 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

22Since 1960

CLIENT HISTORYCLIENT HISTORYLOCATIONTYPES OF STUDYDEMOGRAPHICS OF STUDENTSTYPES OF DEBTSPOLICY AND PROCEDURES

–DROP/WITHDRAWAL POLICIES–RETURN OF FINANCIAL AID

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COLLECTION AGENCY COLLECTION AGENCY ACTIVITYACTIVITY

INITIAL COLLECTION LETTERS CREDIT BUREAU REPORTING PHONE CONTACTS VERIFY INFORMATION SKIP TRACING DEBT RESOLUTION ABILITY TO PAY MAKE DECISION

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AGENCYAGENCYCOLLECTION LETTERSCOLLECTION LETTERS

All letters approved by FDCPA Attorneys

Identify School and AgencyRights of Student Per FDCPAIdentify Debt

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CREDIT REPORTINGCREDIT 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

26Since 1960

AGENCY PHONE CONTACTAGENCY PHONE CONTACT VERIFY SPEAKING WITH BORROWER IDENTIFY YOURSELF AND CLIENT BEING

REPRESENTED VERIFY/OBTAIN INFORMATION

– EMPLOYMENT– PHONE NUMBER– CELL PHONE– ADDRESS– E-MAIL

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AGENCY PHONE CONTACTAGENCY PHONE CONTACT

Debt Resolution – Ability to Pay– Pay in Full– Monthly Payments– Family– Loans– Follow up From Missed Payments

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Skip TracingSkip 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

29Since 1960

LITIGATIONLITIGATION 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

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CONTACT INFORMATIONCONTACT INFORMATION

Karen Reddick800-627-2300, 229

Kreddick@ncmstl.com

Shelia Stewart313-577-5122

sheliastewart@wayne.edu

FDCPA Regulationswww.acainternational.org