Serving Students--By Mission and Mandate
Takeaway information from NACUBO’s 2008 Student Financial Services Conference includes tips on creating customer value and a heads-up on upcoming legislation that impacts higher education.
By Tadu Yimam
Turning the Tables on ROI
Kicking off the comprehensive program was Neal A. Raisman, president of the consulting firm AcademicMaps. In his keynote presentation, “I Am Trying to Help You,” Raisman, former president of Rockland Community College, Suffern, New York, discussed the critical role that financial aid officers play in maintaining student retention levels. The customer service associated with administering the student’s aid, contended Raisman, clearly has ROI implications for both students and institutions. The more ROI perceived by the student, the more likely he or she will remain at the institution—which means better ROI for the college or university as well.
Furthermore, Raisman explained, students need to believe that their investment in the particular school will be met—if not exceeded—based on three types of ROI that make them decide to stay and graduate:
- Financial return on investment. F-ROI, said Raisman, works on two levels for students. The first focuses on the questions: “Am I getting my money’s worth?” and “Do I feel that the money I’m paying to the school is being well spent on me?” The second has to do with whether the student believes staying in school will lead to the job and career for which he or she came to the school to prepare.
- Emotional return on investment. E-ROI refers to the emotional investment in the school that a student and his or her family make, explained Raisman. Through positive customer service experiences, along with other factors, the student can develop trust, attachment, and an allegiance to the institution.
- Associative return on investment. A-ROI, said Raisman, is the sense that by going to this school, “I am saying something about me and about my values and character.”
“If students and staff do not believe they are being positively impacted by the customer service level they receive, the student population is in trouble,” Raisman asserted, “and the school’s well-being, finances, and morale are also in trouble.”
On the other hand, Raisman said, population stability and growth are primary indicators of effective customer service practices. “Hitting retention goals,” he observed, “says the students are pleased with the school, their education, and experience. Faculty members are happier, because students are more receptive to instruction, do their work on time, and are more compliant with faculty direction.”
Raisman recommended several customer-service performance skills for financial aid officers to implement with office staff:
- Smile. This welcoming gesture creates a visual openness.
- Give a name, and get a name. Personalize the customer service experience by getting to know your students/clients.
- Answer the phone within two or three rings. Then, give the most detailed information possible by providing a scripted answer related to the particular question.
- Listen to the student’s problem before speaking. As Raisman put it, “There’s a reason that you have two ears and only one mouth.”
- Be diplomatic. “Even if you end up telling someone where to go,” quipped Raisman, “getting them to ask for directions is diplomacy.”
What Will Washington Do Next?
The potential impact of federal legislation on higher education was top of mind as attendees crowded the sessions that addressed pending bills. A number of issues important to higher education are expected to be prominent in the busy year ahead for Congress. Of particular
significance is the legislation to reauthorize the Higher Education Act (HEA), which is headed to a House-Senate conference committee to reconcile the differences between the two bills, H.R. 4137 and S. 1642.
Terry Hartle, senior vice president of government and public affairs for the American Council of Education (ACE), Washington, D.C., explained that the House and Senate bills contain a number of provisions that will enhance the ability of colleges and universities to serve their students. “At the same time,” Hartle noted, “any legislation that encompasses such a large range of topics inevitably includes provisions that will set undesirable precedents and ultimately be difficult to implement.”
Hartle explained that, in discussions with Congress, ACE has expressed concerns about the large increase in reporting burdens about to be imposed on institutions.
IRS issues. The House bill requires the Secretary of Education to implement an IRS income-matching system that relies on “prior–prior year” income information in calculating eligibility for federal student aid. Hartle suggested: “While a promising proposal, this idea represents a huge change in the student aid system, and it should be piloted and evaluated before full-scale adoption is mandated.” Major concerns with this proposal include the following:
- Use of prior–prior year data has been considered previously and rejected because of fears that it would create serious problems—particularly for independent and nontraditional students whose incomes often fluctuate considerably from year to year.
- The IRS historically has provided only limited support for federal student aid matters.
- Even if the IRS is unwilling to participate, Section 474 gives the Secretary of Education the authority to regulate a solution. Providing such authority to the secretary to regulate need analysis invites significant changes in student aid policy to meet the policy and fiscal objectives of a current administration.
- For the many institutions and all states currently using the Free Application for Student Aid to award student aid funds, this provision would make it important for these institutions to accept “prior–prior year data.”
Perkins Loans. Hartle explained that both the House and Senate bills push to strengthen the Perkins Loan program. The House bill includes language that returns amounts collected on Perkins Loans by the Department of Education to campus revolving funds to assist future low-income students. Hartle added that H.R. 4137 also includes proposals to give financial aid administrators additional flexibility to deal with borrower repayment needs, to increase Perkins Loan limits, to require disclosure when Perkins Loans are included in consolidation loans, and to improve other administrative aspects of the Perkins Loan program.
Student Loan Sunshine Act. Both bills include provisions to improve transparency in the relationships between colleges and student loan providers.
Department of Education Rules
Gail McLarnon, of the U.S. Department of Education’s Office of Postsecondary Education, discussed final rules resulting from recent negotiated rulemaking processes and the passage of the College Cost Reduction and Access Act (CCRAA).
Regarding negotiated rulemaking, McLarnon explained that the four teams appointed last spring by the Department of Education to help devise changes to federal student aid rules focused their work on the following areas:
- Title IV Loan issues, including those surrounding the Federal Family Education Loan program, the Federal Perkins Loan program, and the William D. Ford Federal Direct Loan program;
- The Academic Competitiveness Grant and the National Science and Mathematics Access to Retain Talent Grant (National SMART Grant) programs;
- General provisions; and
McLarnon also discussed the final rules on loan programs that were published on November 1, 2007, with an effective date of July 1, 2008, with early implementation options. (See related Federal Register Update.)
A subsequent speaker, John Kolotos, of the Department of Education, addressed changes to cash management regulations.
As for CCRAA, which was signed into law in late 2007, McLarnon said the legislation “will provide the single largest increase in college aid since the GI Bill.”
Provisions of CCRAA include:
- Reduction in special allowance payments for lenders;
- Cuts in interest rates by 50 percent on subsidized student loans across the next four years, saving the average student $4,400 over the life of the loan; and
- Easier management of student loan payments for borrowers, by guaranteeing that loan repayments will not exceed more than 15 percent of borrowers’ discretionary income and allowing borrowers to have their loans forgiven after 25 years.
The CCRAA also established the Teacher Education Assistance for College and Higher Education (TEACH) Grant program. McLarnon summarized the program, which provides $4,000 per year to individuals who agree to teach under specified conditions, not to exceed $16,000 for undergraduate or postbaccalaureate study and $8,000 for graduate study.
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The program begins with the 2008–09 award year and is targeted to academically qualified students who are willing to make a commitment to teach full time for at least four academic years within eight years of completing the program of study for which the TEACH Grants were received. Recipients must teach at a school serving low-income students and must teach a high-need subject.
McLarnon emphasized that the teaching commitment must not be taken lightly, and the grant cannot be partially earned. If a student does not complete the teaching commitment in its entirety, then all of the grant funds the student received are treated as unsubsidized loan funds, for which interest accrues from the date of the original award. Since grants could total as much as $24,000, failure to complete the teaching requirement would result in a significant loan burden.
E-Billing Is the Future
In the session “Implementing E-Bill: Tips, Tricks and Traps to Avoid,” a team of presenters discussed the advantages of electronic billing processes. The group included Julie Selander, of the University of Minnesota–Twin Cities, Minneapolis; Gayle Callahan, of Johnson County Community College, Overland Park, Kansas; Kristine Cassano, of Miami University, Oxford, Ohio; Ron Hiser of Dartmouth College, Hanover, New Hampshire; and Sandie Rosko, of the University of Washington, Seattle.
The team noted that a variety of software products exist for facilitating electronic billing and encouraged institutions to test them. Rosko highlighted the benefits of check conversion (a payment that begins with a paper check but ends as an electronic debit), which the University of Washington has implemented. The process allows the school to use the efficiencies of electronic payments while still allowing customers to write checks.
Rosko described three types of automated clearinghouse check conversion applications:
- Accounts receivable entry (ARC) converts a check received through the mail to a bill payment or places the check in a bill payment “dropbox.”
- Point-of-purchase (POP) converts checks at the point of purchase and returns voided checks to customers.
- Back-office conversion (BOC) converts checks collected at the point of sale and routes payment to a back office or other centralized location.
The University of Washington implemented the POP and ARC programs in 2006, and campuswide rollouts are scheduled in 2008. Although all schools are different, the presenters noted, the advantages of using electronic systems are compelling. Selander added that e-billing and processing eliminate manual entry errors before and after the deposit, and the resulting simpler reconciliation offers increased security while meeting audit requirements.
Following the presentation, participants discussed problems and potential solutions related to billing, costs, communication with students and families, implementation timelines, and service options.
In a related session, University of Minnesota’s Selander explained a new tool being used by the university’s One Stop Student Services department. Via a Web-based system, students allow parents and guests access to six types of student record information. (See the May 2008 Business Officer article “Virtual Sharing of Student Records.”)
Looking forward to a similarly rich program scheduled for next year, plan ahead to attend the 2009 Student Financial Services Conference, March 8–10, in Savannah, Georgia.
Tadu Yimam is a policy analyst at NACUBO.
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