BURSAR FUNDAMENTALS

Monday, June 12, 20172017 NYSOBBA Annual Conference

Saratoga Springs, NY

Presenter

Susan E. Kirwan

Director of Student Accounts

Binghamton University

NYSOBBA Central Regional Director

AGENDAWhat is a Bursar? Responsibilities-Director Level

Managing Student Accounts

Financial Aid Refunds

Payments Payment Plans

Collections Customer Service & Communication

Regulations Resources

Questions

What is a Bursar?Definition: Bursar – Medieval Latin Term “Bursa” or Purse

Senior professional financial administrator at a school or university, usually dealing with student finances.

Traditionally reporting up through Business Administration/Controller division but has also morphed into Enrollment Services models or ‘One Stops” reporting to Academic Affairs.

Director/Manager of Student Accounts

Director of Student Financial Services

Director of Accounts Receivable

Manager of Financial Operations

Manager of Student Receivables

Assistant Controller/Business Manager

Responsibilities-Director Level Internal Controls/Workflow

Policy and procedures

Cash handling

Segregation of duties

Data integrity/security

Process improvement/mapping

Special programs

Reporting

Responsibilities-Director LevelPolicy and Procedures Checklist Do I know who is responsible?

What if I’m not available?

What is the actual workflow?

Can I be consistent without one?

Can I train without one?

Who can approve what?

How do I deal with exceptions?

Do I have a ‘Plan B” (disaster recovery)?

Responsibilities-Director LevelAccounting and Reconciliation Checklist

Does my data move appropriately through the system?

Do I have an independent financial analyst responsible for reconciliation?

Do I have audit proof cash handling procedures?

How do I handle errors? Journal entries?

Can I minimize systems /process and still account for all transactions?

Am I in compliance with Federal/State/University approved methods (record retention, cash handling, etc.)?

Responsibilities-Director LevelPersonnel, Hiring & Evaluation

Staffing/training/talent selection

Mentoring

Succession

Job descriptions/evaluations

Discipline/corrective action plans

Technology awareness

Financial Aid/Registrar/Student Services and Academic Department relationships

Responsibilities-Director LevelSegregation of Duties Checklist

Is my organizational chart truly functional?

Do all users have appropriate levels of responsibility? ( i.e. does the customer service desk also take cash)?

Do all users have appropriate levels of security (service and technical)?

Who has the keys? Who has access to hardware and software?

Do I have an escalation chart for emergencies?

Managing the Student Account

Primary Record of Financial Transactions

Tuition & fees

Room/Board

Other Institutional Charges

Payments

Adjustments

Managing the Student Account

Electronic Records System Includes Platform for Processes

Records & Registration

Tuition/Fee Calculation

Financial Aid Packaging

Payment Processing

Billing & Presentation

Many Other Processes

Student Account Systems & Invoicing

What Do We Bill? Mandatory Charges:

• Tuition• Fees

Optional/Institutional Charges:• Housing/Meal Plans• Mandatory Student Health Insurance• Parking/Tickets• Other

Student Account Systems & Invoicing

How Do We Bill?

E-Bills – static periodic bills, accessible online

Real Time – current status/dynamic billing

Traditional Method – static paper invoices

Other?

Student Account Systems & Invoicing

Static E-Bills Available securely to the student and others with delegated access.

Flexible if you allow an Opt In/Out (can reduce cost savings and increase administration costs).

More efficient and less costly, especially if mandatory.

Mailing addresses may not be updated as often.

May be able to track access.

Student Account Systems & Invoicing

Real Time - Current Status/Dynamic Billing

Reflects account changes as they happen.

Keeps student/responsible billing party informed of current account status.

May reduce confusion around what amount to pay.

Student Account Systems & Invoicing

Static Paper Invoice Costly; inefficient.

Relies on mail service.

No confirmation of receipt.

Requires student to keep address current.

Not necessarily easily replicated.

Financial AidFinancial Aid is constantly changing and updating each year. Stay current by reviewing these websites: Information for Financial Aid Professionals (IFAP):www.ifap.ed.gov Publications/Blue Book (2013)

Weekly emails/notifications of announcements

HESC – Higher Education Service Corporation:https://www.hesc.ny.gov

Financial AidFederal/NYS Financial Aid Pell

SEOG (Supplemental Educational Opportunity Grant)

Iraq and Afghanistan Service Grant – Veteran/Military Benefits

Subsidized Stafford Student Loan

Unsubsidized Stafford Student Loan

Parent PLUS Loan

Perkins Loan

Nursing Loan

TAP/HESC Scholarships (Excelsior, STEM,AIMS, WTC, etc.)

Financial AidNotification of Title IV Aid You are required to notify students of the posting of their Title IV aid and

there are two types of notifications a school must provide:

A general notification to all students receiving Title IV aid.

A notice when loan funds are credited to a student’s account.

Financial AidPaying Prior-Year Charges Federal funds may only be used to pay for the student’s costs for the

academic year for which the funds were applied for. However, a school may use current-year funds to satisfy prior award year charges for tuition and fees, room, or board (and with permission, educationally related charges) for a total of not more than $200.

Financial AidDepartment of Education Cash Management Rules Revised Fall 2015

The revision will particularly impact colleges and universities that offer bank accounts to students through agreements with financial institutions as well as those that use third-party servicers to process Title IV credit balance refunds. Several other changes to the regulations will impact all colleges and universities. The rules, with a few exceptions, were effective July 1, 2016. Review details at NACUBO.org:

http://www.nacubo.org/Business_and_Policy_Areas/Student_Financial_Services/Student_Financial_Services_News/ED_Revises_Cash_Management_Rules.html

Financial AidDelivery of Federal Funds If the financial aid disbursements to the student’s account at the school

creates a credit balance, you must pay the credit balance directly to the student or parent as soon as possible, but no later than 14 days after the date the balance occurred on the student’s account.

The law requires that any excess PLUS Loan funds be returned to the parent. However, the parent may authorize your school (in writing) to transfer the proceeds of a PLUS Loan to a student directly.

RefundsFinancial Aid Credit Balances

Must be available within 14 days:

• From the time of disbursement or

• First day of classes

• Whichever is later

By:

• Direct Deposit

• Paper Check

• Debit Card

RefundsCredit Balances

Direct Deposit:

• ACH into checking or savings account of an already existing bank account.

Paper Check:

• Can be picked up in office or mailed to the address on record.

• Some institutions charge a fee for replacement checks.

RefundsOutstanding Paper Checks SUNY Institutions: New York State’s Abandoned Property Law requires certain

entities to transfer abandoned money or securities to the New York State Comptroller’s Office of Unclaimed Funds. The Comptroller serves as the custodian of unclaimed funds until they’re claimed by the rightful owners.

http://osc.state.ny.us/ouf/reporters/

Federal Financial Aid Refunds may NOT be escheated. Must be returned to the program within 240 days.

PaymentsVarious Ways to Accept Payments

In Person - Cash, Check, Credit/Debit cards

Snail Mail, Lockbox - Checks

Online - ACH(electronic check), Credit cards, debit cards

Phone - Credit/Debit cards

Not all institutions accept all types of credit cards and some no longer have a credit card machine in house due to the rigorous compliance policies.

Payments

Credit Cards Chargebacks Return of funds to a student/responsible billing party, that is initiated by the

student/responsible billing party’s bank from a dispute by the cardholder.

To encourage compliance, banks may, at their discretion, charge your institution a penalty per chargeback. In addition, both Visa and MasterCard may assess severe fines against banks that retain merchants with high chargeback frequency.

PaymentsCredit Cards = PCI Compliance PCI is a set of requirements designed to ensure that ALL companies that

process, store or transmit credit card information maintain a secure environment. Essentially any company that has a Merchant ID.

Applies to ALL organizations, regardless of size or number of transactions.

Using a third-party company does not exclude you from being PCI compliant. It may cut down on your risk exposure but you cannot ignore PCI.

Cards include any debit, credit, and pre-paid cards branded with one of the five card association/brand logos - American Express, Discover, JCB, MasterCard, and Visa International.

Payments

Credit Cards = PCI Compliance Outsourcing does simplify payment card processing but do not forget, your

institution must protect cardholder data when you receive it, and process charge backs and refunds.

Good Practice - request a certificate of compliance annually from a third party provider(s).

https://www.pcisecuritystandards.org

PaymentsThird Party Payments Third parties are typically invoiced directly for the charges they have agreed to pay,

but some third party entities may not require an invoice.

The liability for payment of tuition and fees ultimately lies with the student if a third party fails to pay all amounts as agreed.

Examples:• Private Source Scholarships

• Vocational Rehabilitation –State and Federal

• Pre-Paid/529 Plans

• Contract Courses

Payment Plans/Education LoansTruth In Lending

Regulation Z, which implements the Truth in Lending Act (TILA) adds disclosure and timing requirements that apply to creditors (institutions) making private education loans for educational expenses. The HEOA (Higher Education Opportunity Act) requires that institutions obtain a self-certification form signed by the customer prior to them accepting the loan.

Congress enacted the Truth in Lending Act (TILA), 15 U.S.C. 1601 et seq., to regulate certain credit practices and promote the informed use of consumer credit by requiring uniform disclosures about its costs and terms .Under TILA section 128, creditors must provide TILA disclosures to consumers in writing before consummation of certain closed-end credit transactions.

http://www.nacubo.org/documents/initiatives/Private_Education_Loan_TILA_Checklist.pdf

Payment Plans/Education LoansPayment Plans that comply with TILA

Must be paid-in-full by the end of the semester.

Must be payable in four or fewer payments.

Must not charge interest.

Must not include a "finance charge”.

May include an "application fee" if charged to all applicants, regardless of whether or not the application is approved (make this payable before the application form is processed).

May include a fee for late payments.

Payment Plans/Education LoansEducation Loans that comply with TILA

Terms:• Must be paid-in-full in less than 90 days; or• Must be paid-in-full in less than 1 year and must not include an interest charge;

Fees:• May include an application fee;• May include a fee for late payments

These rules apply differently to non-institutional creditors, including auxiliary service corporations and foundations. If a campus has agreements that allow an outside creditor to make TPPs, ELs or other non-Title IV loans to students, it should include language that clearly places the burden of complying with HEOA, TILA and Regulation Z (12 CFR part 226) on that outside creditor.

Payment Plans/Education LoansPayment PlansExternal

Outsources to third party companies:• Installment plans are offered interest-free and require an enrollment fee. Since these plans

are not considered loans, no credit check is required.• automated payment plans that are deducted monthly directly from a checking account or

paid by Credit/Debit card.

Internal

Requires upkeep of enrolled students.

Requires record of missed payments and/or late payments:• Can be a costly alternative to external plans depending upon the number of enrolled

participants .

CollectionsManaging Receivables

Not everyone will pay their bills in a timely manner:

Consistent and Timely Billing

Make It Easy to Make Payment

Strong Customer Service

Enrolled vs. Not Enrolled

CollectionsEnrolled

Monthly billing

Reminders (Email/Phone calls)

Holds (Registration, Transcript, Diploma)

Registration Cancellation

Late Fees

CollectionsRegistration Cancellation PROS:

Can be very effective.

Can free up seats for paying students.

CONS:

Angry student and families.

Can impact retention.

Requires a lot of communication and special handling.

CollectionsConsiderations for Cancellation

When to cancel:

Before classes start

After classes start

Who to cancel:

Past Due balance

Unpaid balance

Thresholds

Returned Payments

CollectionsNo Longer Enrolled Holds (Registration, Re-dmit, Transcript, Diploma)

Late Fees

Letters and/or Calls

Refer to Collection Agency/AG’s Office (SUNY)

Credit Reporting

Legal Action

Bad Debt Write-Off

Customer Service & Communication

Service Philosophy

Key Factors:

School Culture, Current Administration, Partner Departments, Your team, Your experience and personal philosophy

Who is served:

Students and families

Other Campus Departments

Customer Service & Communication

Where Does Customer Service Fit

Customer Service is part of everything you do:

Starts with getting the transactions right.

It’s impacted by the structure of your location.

The tone is set upon admission.

People get ugly about money.

Customer Service & CommunicationProviding ServiceIncoming Contacts:

Department Email, Phone, Walk Up

Inquiry Levels:

Level One – basic

Level Two – requires some special knowledge

Level Three – very complex

Hot Potatoes – usually angry

Training:

On the Job Training, Reference Materials (including searchable procedures), Classes/Seminars

Customer Service & Communication

The Best Service is ProactiveHelp Students and Families Help Themselves

Webpages

Communications

Leverage Your Partners: • Chancellors/President’s Office• Admissions/Financial Aid• Community and High School Partnerships

Customer Service & Communication

Communication Online Bill/Student Account Information

• Web Presence• Social Media• University/College Publications• Proactive Emails/Text Messages to Target Populations

Refund Check Notification

Registration Cancellation Warning

Hold Notice

Bill Notification

Customer Service & CommunicationCommunication

Online Bill/Student Account Information:

Bill Display

Amount Due

Display Transactions

Financial Aid Pending

Title IV Permissions

Direct Deposit Set up

1098T electronic delivery

Checklists

Hold Information

RegulationsDepartment of Education

Family Educational Rights and Privacy Act (FERPA) http://www2.ed.gov/policy/gen/guid/fpco/ferpa/index.html

US Department of Education Federal Student Aid Handbook http://ifap.ed.gov/fsahandbook/attachments/1011FSAHbkVol4Master.pdf

RegulationsOther Federal Regulations Federal Trade Commission/Truth in Lending: https://www.ftc.gov/enforcement/statutes/truth-

lending-act

Gramm-Leach Bliley: https://www.ftc.gov/tips-advice/business-center/privacy-and-security/gramm-leach-bliley-act

Red Flags Rules: https://www.ftc.gov/tips-advice/business-center/privacy-and-security/red-flags-rule

Fair Debt Collection Practices Act: http://www.ftc.gov/os/statutes/fdcpajump.shtm

HIPAA (health charges, health professions loans, AOR : https://www.hhs.gov/regulations/index.html

IFAP Information For Financial Aid Professionals: http://ifap.ed.gov/ifap/

(Blue Book, Dear Colleague Letters, Federal Registers, Financial Aid Handbook, Federal Training)

RegulationsDepartment of Treasury

1098T - Publication 970:

https://www.irs.gov/pub/irs-pdf/i1098et.pdf

Changes coming for 2017 which eliminate reporting of charges

Excess Cash Payments/Patriot Act:

http://www.irs.gov/pub/irs-pdf/f8300.pdf

$10,000 cash (IRC Section 6050 I)

Substantial overpayments (Title 31 USC Section 5332)

Record RetentionRecords Retention

NYS Archives Rule – http://www.archives.nysed.gov/records/mr_retention.shtml.

Federal Financial Aid – 3 years after graduation (Problem for us > five and seven years in NYS).

Perkins has a few different rules.

Your own college policies – usually an office or employee who is the Record Retention Officer.

A word to the wise - do not save anything any longer than you have to - you’ll avoid a lot of issues!

QuestionsYou will never find a more helpful and generous group of people to work with, than your colleagues in NYSOBBA and NACUBO:

Join the NYSOBBA and NACUBO List-Servers

Peruse the websites

http://www.nysobba.org/

http://www.nacubo.org/

Thank you for attending!