March 15, 2011
March 15, 2011
Student Accounts Receivable
15.5. COLLECTION OF PAST DUE STUDENT ACCOUNTS
A. Collection of Delinquent Tuition
Student Accounts Receivable (SAR) collects delinquent tuition and fees. The outstanding debt can include tuition, required fees, and fees related to programs, services, and courses, in addition to any other amounts related to enrollment at The University of Texas at Austin. The process of collection involves determining which students are delinquent, notifying each student of outstanding debt and offering a repayment agreement option, reporting the student to the credit bureau if the debt is not paid, monitoring payments, and reporting full payment of delinquent accounts to the appropriate credit bureaus on a monthly basis. A student who has delinquent tuition and fees will not be allowed to return to the university the following semester.
B. Collection of Delinquent Loans
1. Collection Process for Institutional Loans
Tuition loan or cash loan balances that are not paid by the due date or remain uncollected are considered as past due and become a financial bar, which prevents receipt of university services, including registering for class, obtaining new institutional loans, and receiving official transcripts. Loans that are four months past due are turned over to a collection agency, and a collection fee is added to the loan. After one year, the university recalls the account and the collection fee is reversed. The university regularly notifies the borrower of the past-due loan. After six months, if payments are not made monthly, the loan is again sent to a collection agency.
2. Collection Process for Federal Loans
a. Due Diligence Requirements
Federal loans have collection requirements that are specified in the Code of Federal Regulations. Perkins loans are governed by the Code of Federal Regulations, Title 34. Education, Subtitle B. Regulations of the Offices of the Department of Education, Chapter VI. Office of Postsecondary Education, Department of Education, Part 674. Federal Perkins Loan Program, Subpart C. Due Diligence §674.41 Due Diligence General Requirements. Nursing Faculty Loan Program (NFLP) loans are regulated by the Department of Health and Human Services.
For details regarding Perkins loans, please refer to the Perkins Loan Services Web page.
For details regarding the Nursing Faculty Loan Program (NFLP), please refer to Nursing Faculty Loan Services Web page.
The following due diligence requirements are rigorously followed:
- Pre-loan counseling (entrance interview) and exit interviews are conducted by the Office of Student Financial Services (OSFS) for Perkins loans. The School of Nursing conducts all interviews for the NFLP.
- When an account is delinquent by 60 days or more, the borrower receives a final warning letter as required by federal regulations. When an account is six months past due, it is referred to an outside collection agency and a collection fee is added to the amount owed.
- Loans which have been sent to a collection agency twice and remain unpaid are referred to The University of Texas System’s Office of General Counsel (OGC) for litigation.
- Perkins loans for which the borrower cannot be located for litigation proceedings or which OGC determines to be uncollectible are assigned to the United States Department of Education as default assignments. Nursing Faculty Loan Program loans that are deemed uncollectible by OGC may be referred to the U.S. Department of Health and Human Services for write-off.
- If a Perkins borrower is certified by a physician to be totally and permanently disabled, the university must assign the loan to the U.S. Department of Education. If an NFLP borrower is certified by a physician to be totally and permanently disabled, the university works with U.S. Department of Health and Human Services to determine the outcome of the loan.
b. Interest and Collection Costs
Interest and collection costs, including attorney fees, will be assessed and added to all debts due to the university as required or permitted by law. If collection is made after the debt has been turned over to a collection agency, the borrower must pay the collection fee to the collection agency.
Student Accounts Receivable (SAR) handles initial contact with borrowers for all bankruptcy claims regarding tuition or loan accounts and federal or institutional loans. Departments are notified if a bankruptcy is received for someone who owes a debt to the department, and the department is required to annotate the account in Centralized Receivables and take appropriate action. SAR forwards Chapter 13 bankruptcy claims, along with debt documentation, to UT System’s Office of General Counsel (OGC). No further action against the debtor is taken until notice of final discharge or dismissal of the bankruptcy is received from OGC. Chapter 7 bankruptcies are no longer referred to OGC; the university must annotate accounts with pending bankruptcy information and take appropriate action when the bankruptcy is dismissed or discharged.
For federal loans, after all attempts at collection have failed, SAR sends loan accounts to OGC to litigate, providing that the litigation costs do not exceed the amount which can be recovered, and providing the balance is greater than or equal to the minimum set by OGC.