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NOTE: On August 13, 2018, the model language for student financial responsibility agreements was updated to address attorney fees and how a student can revoke his or her consent to receive calls made using automatic telephone dialing systems. The links on this page have been updated to reflect those changes.

Financial responsibility agreements help to ensure that students understand their obligations and protect the institution from risk of default. An updated advisory report from NACUBO provides sample language that colleges and universities may want to consider in developing such agreements.

NACUBO Advisory Report 2018-1, Best Practices for Financial Responsibility Agreements with Students, is an update to the 2015 report and offers a template of priority and optional subjects to assist schools in developing or strengthening their agreements. Priority subjects address a promise to pay, collections, and communication. Optional subjects cover financial aid, billing, returned payments, withdrawal, privacy rights, and more.

The update addresses various court decisions and changes to case law affecting the ability of a college or university to pass on the cost of third-party collection fees to a student who is in default on his or her obligation to the institution.

The previous version of the advisory report used language that was influenced by the Bradley v. Franklin Collection Services, Inc. case [739 F.3d 606 (11th Cir. 2014)]. Later, Annunziato v. Collecto, Inc. [207 F.Supp.3d 249 (E.D.N.Y. 2016)] raised the profile of consumer claims against schools and agencies who assess and/or collect fees. In this class action litigation, the agency was attempting to recover a non-federal collection fee for a school, but the school could not produce a student agreement executed by the class representative. Additionally, the court disagreed that the language in the unsigned student agreement supported a percentage-based collection fee wherein the school was “made whole.”

To address those concerns, the advisory report now suggests using language similar to that in the Robertson v. Enhanced Recovery Company, LLC [2017 WL 5951584 (D.N.J. Nov 30, 2017)] case. There, the court decided that “the contract states only that the collection fee is meant ‘to cover collection-related costs’; it does not limit the collection fee to the exact cost [the collector] incurs in collecting the underlying debt.”

Members Only

The sample language is available in both PDF and Word format to make it easier for members to use and revise the model language to meet their needs. NACUBO member login required.


Bryan Dickson

Director, Student Financial Services and Educational Programs


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