Memorandum #214 Accounts Receivable Collection and bad Debt Management Policy

Date of Issuance: April 5, 2001
Revised Date of Issuance: February 5, 2009

I. Student Tuition

Tuition is due each semester prior to the start of classes and if accounts are not paid in full student schedules are cancelled. As an accommodation to students, the College provides a deferred payment option through the third party vendor Academic Management Services (AMS). When students register on time, payments are received in four installments (July through October for fall and December through March for spring). Late registrants make a 50 percent cash payment and schedule the balance over two installments (September and October for fall, February and March for spring). Billings and student payments are processed and received by AMS and then forwarded to the College.

If payments are not received in full by November 25th for Fall and April 25th for Spring, the students will be prevented from registering for subsequent terms and the accounts will be referred to a collection agency for level I follow up correspondence. This is done for a nominal fee and involves mailing multiple notices to defaulters over a 45-day period.

Students not paid in full after level I will be assigned to a more aggressive level of collection (level II) that may conclude in legal processes and credit reporting.

II. Third Party Tuition Billings

Through the Division of Community Services, the College enters into agreements with Business and Industry clients that involve a variety of arrangements for the delivery of credit and non-credit instruction. Payment terms can range from standard tuition rates per student (employee) to a lump sum for the total activity. These arrangements routinely involve written agreements that include billing arrangements for tuition, fees and books. Individual student accounts are credited and a receivable is established with the Business and Industry client. Upon the completion of registration and textbook activity, a bill is issued to the client and this usually occurs mid-way into the instructional process.

• All Business and Industry agreements are to include terms that require payment upon receipt of College invoice.
• Depending on circumstances, a client may be requested to provide a current financial statement in an effort to substantiate credit worthiness.
• Registration of students for subsequent semesters is contingent upon payment for the current term.
• If payment is not received by the end of the academic year, relationship with the client is suspended.
• Accounts associated with suspended relationships will be referred to an agency for aggressive collection.

III. Employee Computer Loan Program

As part of the College's staff development initiative, a computer loan program is offered to College employees who are able to purchase computers for the home. This technology enhancement resulted in a large number people who are developing computer skills with software packages that are used in the work place.

• Promissory notes are signed and re-payment plans are accomplished through payroll deduction.
• In the event an employee separates from the College, payment of outstanding balances will be accelerated through unused vacation, cash payment or a new payment agreement not to exceed one year.
• Accounts that go 30 days past due will be referred to the level I collection process.
• Accounts that go 60 days past due will be assigned to level II for aggressive collection.

IV. Forgivable Loan Program

In an effort to assist employees with part-time education beyond the associate degree level, the College will lend fifty (50%) percent of the tuition paid to that institution during the course of the year providing that a limit of $10,000 shall be imposed on such loan as a revolving account over a period years.  The loan will be forgiven at the rate of fifty (50%) percent at the end of the year following that in which the loan was granted, and the remaining fifty (50%) percent at the end of the third year.

Tuition assistance of $10,000 per year to a limit of $25,000 is also available for employees who enroll as full-time graduate students and have been granted a full-time leave of absence. These loans are forgiven at the following rate: twenty-five (25%) percent at the end of the first academic year after the leave, and twenty-five (25%) percent at the end of each of the three (3) following academic years.

• Promissory notes are signed.
• In the event an employee separates from the College, payment of \ outstanding balances will be accelerated through unused vacation, cash payment or a new payment agreement not to exceed one year.
• Accounts that go 30 days past due will be referred to the level I collection process.
• Accounts that go 60 days past due will be assigned to level II for aggressive collection.

V. Other Vendor Receivables

The College will engage in other program-related activities that include accounts receivable relationships.

• All agreements are to include terms that require payment upon receipt of College invoice.
• Depending on circumstances, a vendor may be requested to provide a current financial statement in an effort to substantiate credit worthiness.
• If payment is not received by the end of the academic year, relationship with the client is suspended.
• Accounts associated with suspended relationships will be referred to an agency for aggressive collection.

VI. Perkins and Nursing Loan Programs

These are Title IV financial aid programs that are disbursed and administered by the College. The College no longer participates in the Nursing Loan Program but there is a continued responsibility to collect outstanding loan balances.

• A third party vendor (EFG Technology) who complies with all Title IV due diligence requirements administers the billing and collection of loan activity.
• In compliance with Title IV regulations, the College refers all accounts that are 120 days old to an agency for aggressive collection and, if necessary, litigation.

VII. Bad Debt Write-off

When accounts go unpaid after exercising all due diligence, the receivable will be written off as uncollectable.

• Individual accounts with balances of $10,000 or greater require Board of Trustee approval prior to write-off.
• In any event when an individual account balance of $100,000 or more becomes 90 days past due, the Board of Trustees must be notified.