COLLECTING STUDENT ACCOUNTS

1. COLLECTING STUDENT ACCOUNTS MASFSA Michigan Association for Student Financial Service Administrators Shelia Stewart, Wayne State University And Karen Reddick, National Credit Management

2. SANDBOX RULES • This session is open forum • Audience participation is encouraged • Questions and comments are welcome throughout the presentation

3. TYPES OF STUDENT DEBT AT WSU • TUITION & FEES • RETURNED FINANCIAL AID • INSTITUTIONAL LOANS • ROOM & BOARD

4. GETTING INFORMATION • Registration (Before Debt Occurs) - Name - Local Address - Local Phone Numbers - Permanent Address and Phone Number - Social Security Number - Birth Dates - References * Alternates other than parents * Be aware of info provided including address and phone numbers - Student e-mail address and cell phone number - Spouse Information

5. DISCLOSURE OF INFORMATION • What to Disclose: • Assessing Collection Cost • Late Charges and/or Interest Charges • Drop and Withdrawal Policy • Consequences of Missing Payment

6. DISCLOSURE OF INFORMATION • Ways To Disclose Information: • Promissory Notes • Truth/Lending Statements • Financial Aid Award Letters • Website & Telephone Registration • Financial Responsibility Statement with electronic signature • Registration Forms • Payment Plan • Terms of Agreement • Catalogs and Handbooks • Policies and Procedures • Drop and Add Policy • Withdrawal Policy • Return of Title IV Funding • Admission Forms

7. ADDING COLLECTION AND ADDITIONAL FEES • CATALOGS/HANDBOOKS • Signature agreeing to rules and guidelines • PROMISSORY NOTES • Signed • Bankruptcy Verbiage (Educational Loan) • WEBSITE & TELEPHONE • Personal Identification Number • Agree to statement pertaining to addition of collection cost before continuing with registration

9. MAKE IT EASY TO PAY • Types of Payments: • Credit Cards • Checks • ACH • Wire Transfers • Checks Over the Phone • Western Union

10. MAKE IT EASY CONTACT • Concise Statements • Provide Complete Information • Contact Person • Phone Number • Toll Free Number • Fax Number • Address • Email • Self Addressed Envelope • Website Access to Account Info • Secure PIN • Ability Pay On-Line (single & monthly payments) • View Payment History • View Account History

11. WSU COLLECTIONS • Final Demand Bill • Issued at the end of the semester • Informed of Collection Costs • 10 days to Pay or Payment Agreement • Accounts Forwarded to a Collection Agency • Pre-collect Period of 45 days • Past Due Letters • 30 Day and 15 Day

12. DELINQUENT STUDENT ACCOUNTS • Effective letters • Create an urgency • 3 C’s • Clear • Complete • Concise

13. COLLECTION CALLS • One attempt after each letter sent • Identify Borrower • Identify Yourself • Request Payment in Full • Listen to what the borrower has to say. • Determine Problem • Determine Solution • Close the Deal • Update the File

14. MISSING IN ACTION • Skip tracing - Let the Web Work For You • Free Websites - Google - White Pages - Skip Ease • Paid Websites - Accurint • Merlin • Alumni Finder • Credit Bureaus - Experian - Trans Union - Equifax

15. Students vs. Non-Students • Students • Drop from classes • Cut off Meal Plans • Remove from Residence Halls • Hold Transcripts • Hold on Registrations and all Services • Non-Students • Hold Transcripts & Diploma • Hold on Registrations • Report to Credit Bureaus • Collection Agencies

16. PLACING WITH AGENCIES • TOOLS TO HELP IN COLLECTIONS • Place at 120 - 180 Days or less • Collection Cost • Reporting to Credit Bureaus • Litigate • Provide all information available • Prom Notes • Registration Forms • Reference Sheets • Web Registration • Admission Forms

17. FEDERAL AND STATE LAWS • STATE/FEDERAL LAWS • REGULATES CREDITORS COLLECTING DEBT INCLUDING 3RD PARTIES • FAIR DEBT COLLECTION PRACTICE ACT (FDCPA) • REGULATIONS GOVERNING ONLY 3RD PARTIES • Bankruptcy Abuse Prevention and Consumer Act of 2005 (BAPCA) • Expanded definition of student loans for purposes of sections 523(a)(8) exception to discharge. • Adds qualified educational loans as defined under section 221 of Internal Revenue Code to those educational loans currently considered to be non-dischargeable. (Including tuition, books fees, etc.)

18. FDCPA PROVISIONS MICHIGAN A licensee shall not commit any of the following acts: demanding or obtaining a share of the compensation for service performed by an attorney in collecting a claim or demand or collecting or receiving a fee or other compensation for service performed by an attorney in collecting a claim or demand or collecting or receiving a fee or other compensation from a consumer for collecting a claim, other than a claim owing the creditor pursuant to the provisions of the original agreement between the creditor and debtor. STATES WITH NO PROVISIONS ALABAMA ALASKA FLORIDA KENTUCKY MARYLAND MONTANA OHIO OKLAHOMA RHODE ISLAND SOUTH DAKOTA UTAH

19. FDCPA GENERAL RULE THE ADDITION OF ANY INTEREST, SERVICES FEES, COLLECTION COSTS OR OTHER EXPENSES INCIDENTIAL TO THE ORIGINAL DEBT IS PERMITTED WHEN “SUCH AMOUNT” IS EXPRESSLY AUTHORIZED BY THE AGREEMENT CREATING THE DEBT OR PERMITTED BY LAW.

20. PLACING WITH AGENCY • Electronic • Secure Website • Email Excel File • Webfolder • FTP • Billing Service • Manual • Print Screens • Placement Forms

21. INFO NEEDEDWHEN PLACING ACCOUNTS • Required Information • Name • Phone Number • Address • Social Security Number • Delinquency Date • Required by FCRA to report to Credit Bureaus • Additional Helpful Information • Date of Birth • Balance Breakdown • Principal • Late Charges/Collection Cost • Interest • Place of Employment • References • Date of Last Payment • Break Down of Charges • Co-Signers Information

22. CLIENT HISTORY • LOCATION • TYPES OF STUDY • DEMOGRAPHICS OF STUDENTS • TYPES OF DEBTS • POLICY AND PROCEDURES • DROP/WITHDRAWAL POLICIES • RETURN OF FINANCIAL AID

23. COLLECTION AGENCY ACTIVITY • INITIAL COLLECTION LETTERS • CREDIT BUREAU REPORTING • PHONE CONTACTS • VERIFY INFORMATION • SKIP TRACING • DEBT RESOLUTION • ABILITY TO PAY • MAKE DECISION

24. AGENCYCOLLECTION LETTERS • All letters approved by FDCPA Attorneys • Identify School and Agency • Rights of Student Per FDCPA • Identify Debt

25. CREDIT REPORTING • 45 DAYS • 7 Years for Reporting (Different from actual statue of limitation in the state which is 6 years) • 3 MAIN CREDIT BUREAUS • EXPERIAN • EQUIFAX • TRANS UNION

26. AGENCY PHONE CONTACT • VERIFY SPEAKING WITH BORROWER • IDENTIFY YOURSELF AND CLIENT BEING REPRESENTED • VERIFY/OBTAIN INFORMATION • EMPLOYMENT • PHONE NUMBER • CELL PHONE • ADDRESS • E-MAIL

27. AGENCY PHONE CONTACT • Debt Resolution • Ability to Pay • Pay in Full • Monthly Payments • Family • Loans • Follow up From Missed Payments

28. Skip Tracing • Credit Reports • Review Credit History • Demographics • Employment • Contact Trade Lines • Determine Ability to Pay • Websites • Accurint • Merlin • Alumni Finder • Google • Skipease • White Pages • Teacher Locators • Doctor/Attorney Locators • Professionals Locators • Asset/Property Locators • Deceased • Military Locators

29. LITIGATION • Good Candidate • Review Credit Report • Liens • Other prior judgments • Employment History • Are there any Assets? • Know Your State Statutes • What you can and can not do • Statute of Limitations • 6 years in Michigan • Ability to Collect With or Without Agreement

30. CONTACT INFORMATION Karen Reddick 800-627-2300, 229 Kreddick@ncmstl.com Shelia Stewart 313-577-5122 sheliastewart@wayne.edu FDCPA Regulations www.acainternational.org