General Policy and Procedure
Tuition and Fees Credit Policy
It is the policy of Purdue University that tuition and fees must be paid prior to class attendance. This policy was amended on July 31, 1968 to permit the deferred payment of tuition and fees by the West Lafayette and Regional Campus Bursars. Deferred payment options as well as detailed collection procedures are outlined in the West Lafayette Fee Deferment Credit Policy and Procedures Manual.
General University Receivables
University Collections recommends as established procedure, that payment should always be secured prior to or at the time of sale or delivery of service whenever possible. This procedure applies to any exchange of goods or services resulting in a debt to the University. Credit has been extended when payment is not collected at the time of service or at the point of sale. Once credit has been extended, consistent billing and collection procedures must be followed as outlined by University Collections.
The mission of the University Collections Office is to effectively collect outstanding receivables owed to Purdue University, thereby insuring optimal cash-flow and sound fiscal management. Effective collection means, a controlled and consistent method of collection by the University Collection Office, resulting in reduced delinquencies and write-off. Payment-in-full is always the primary goal and supports the University's policy. The University's mission of providing above-standard service to its customers should not be adversely affected by the Collection policy.
Collection Procedures and Definitions
Detailed and specific procedures have been developed to assist in complying with the collection policy.
PSCD (Public Sector Collections and Disbursements) System Support
The PSCD system offers several collection mechanisms. Utilization of the system features includes: Lock codes, comment screens, installment payment options, reminder and dunning billings, automated encumbrance (student holds) with the Student System, and aging reports.
Collection Activity -- University Collections Office
Although the ultimate responsibility for collection rests within the University Collections Office, assistance from the credit-issuing departments is necessary. Within the University Collections Office, the Accounts Receivable staff have the responsibility for collection of outstanding receivables. Collection procedures have been developed to encourage full payment on outstanding receivables, while maintaining customer service, providing reliable audit trails, and achieving optimal cash-flow.
Collection Activity -- Departmental
To provide customer service and insure resolution of internal errors, assistance from credit-issuing departments is imperative. Individual departments will be able to encourage payment of outstanding receivables by use of the collection procedures. Understanding the collection procedures by individual departments will guide each department in its responsibility, resulting in consistent and effective collection.
Collection Agency Referral
The use of a third-party to collect delinquent receivables is often necessary. Collection procedures have been developed to insure consistent and timely use of this collection mechanism.
Collection and Skiptracing
Collection procedures have been developed with the goal of maximizing collection effort. Staffing and resources will be critical in insuring the success of the collection effort. Refer to Work Distribution and Collection Time-line charts below.
Encumbrances (Student Holds)
The encumbrance/student hold procedures established through the Accounts Receivable area of University Collections is based upon an original policy approved by the Vice President for Student Services and the Business Manager and Assistant Treasurer dated May 16, 1977. The issuance of an encumbrance/student hold due to a past-due financial obligation is intended to prevent the release of an academic transcript, issuance of a diploma, and the completion of a future class registration. The academic records of student account holders with debts due the University will be encumbered no later than 30 days old, (after 10 days on returned items such as returned checks and e-pays).
Finance and Late Charge Assessment
The assessment of finance and late charges on all delinquent receivables is an integral part of collection. However, the current Accounts Receivable policy does not include this feature. The assessment of finance and late charges will be an important enhancement to the future credit and collection policy. The income generated from an assessment would assist the University in defraying the costs of collection.
Installment Payment Agreements
The intent of the installment payment option is to effectively collect a debt when payment in-full is not feasible. It will be used as a collection mechanism by Accounts Receivable to encourage payment and reduce delinquencies. It is not the policy of Purdue University to use this mechanism as an alternate method of payment for customers.
Returned Checks and Returned Electronic Payments
University Collections will maintain a list of returned check/electronic offenders, who have had two or more returned items within a twelve-month period. Processes and systems should be modified to ensure that only cash or certified funds are accepted from a bad check/electronic offender for a minimum of twelve months after receiving the second returned item. A returned item service fee as allowed by Indiana State Law should be assessed on all items returned. Customers identified as bad check offenders will be requested to pay all future billings with cash, money order or cashiers check. A bad check offender list will be compiled and provided to the major cash handling areas on campus to help prevent bad checks from being accepted at other cash collection points.
Small Claims Court
Utilization of Small Claims Court is one of many collection tools used to effectively collect outstanding receivables. Collection procedures may also incorporate the use of litigation through the University attorney to maximize the collection effort.
A goal of the collection procedure is to provide more support to internal collections on delinquent accounts prior to the referral to a third party collection agency or small claims suit. Typically, the time schedule to refer or sue an account is at the 150-day stage, (30-60 days for returned check and EPAY accounts).
The goal of increased telephone and E-mail contact is to enhance the collections process earlier and to provide more broad coverage to accounts such as current semester tuition, housing and possibly regional campus accounts. Telephone contact is preferred over E-mail use, however, in certain situations, E-mail may be effective. An attempt to increase customer contact will supplement the existing collections process.
Uncollectible Accounts Receivable and Write-Off Policy
The write-off policy is developed to enhance collection and ultimately reduce University write-offs in total. An account will be considered uncollectible after all customary efforts to collect have been exhausted, or if the balance is too small to warrant ongoing collection action. Click here for more information.
Work Distribution Plan and Collection Time-line for Accounts Receivable Collections
Effective with this plan, the A/R calling list will include customer accounts valued at $500 or more. The current dunning notices are incorporated within the PSCD follow-up billing routines. Phone calls will be made on customer accounts valued under $500 as staffing allows. These dollar limits may vary from time to time depending on actual account volume and staffing. The tables below outlines staff responsibilities with regard to general collection routines.