BURSAR FUNDAMENTALS Wednesday June 13 2018 NYSOBBA Annual

BURSAR FUNDAMENTALS Wednesday, June 13, 2018 NYSOBBA Annual Conference Syracuse, NY

Presenter Susan E. Kirwan Director of Student Accounts Binghamton University NYSOBBA Central Regional Director Kevin Smith Assistant Vice President & Director, Student Records & Financial Services Canisius College NYSOBBA Board Director of Conferences

AGENDA What is a Bursar? Responsibilities-Director Level Managing Student Accounts Financial Aid Payments Refunds Payment Plans Collections Customer Service & Communication Regulations Questions Resources

What is a Bursar? Definition: Bursar – Medieval Latin Term “Bursa” or Purse Ø Ø Senior professional financial administrator at a school or university, usually dealing with student finances. Traditionally reporting up through Business Administration/Controller division but has also morphed into Enrollment Services models or ‘One Stops” reporting to Academic Affairs. l Director/Manager of Student Accounts l Director of Student Financial Services l Director of Accounts Receivable l Manager of Financial Operations l Manager of Student Receivables l Assistant Controller/Business Manager

Responsibilities-Director Level l Internal Controls/Workflow l Policy and procedures l Cash handling l Segregation of duties l Data integrity/security l Process improvement/mapping l Special programs l Reporting

Responsibilities-Director Level Policy and Procedures Checklist l Do I know who is responsible? l What if I’m not available? l What is the actual workflow? l Can I be consistent without one? l Can I train without one? l Who can approve what? l How do I deal with exceptions? l Do I have a ‘Plan B” (disaster recovery)?

Responsibilities-Director Level Accounting and Reconciliation Checklist l Does my data move appropriately through the system? l Do I have an independent financial analyst responsible for reconciliation? l Do I have audit proof cash handling procedures? l How do I handle errors? Journal entries? l Can I minimize systems /process and still account for all transactions? l Am I in compliance with Federal/State/University approved methods (record retention, cash handling, etc. )?

Responsibilities-Director Level Personnel, Hiring & Evaluation l Staffing/training/talent selection l Mentoring l Succession l Job descriptions/evaluations l Discipline/corrective action plans l Technology awareness l Financial Aid/Registrar/Student Services and Academic Department relationships

Responsibilities-Director Level Segregation of Duties Checklist l Is my organizational chart truly functional? l Do all users have appropriate levels of responsibility? ( i. e. does the customer service desk also take cash)? l Do all users have appropriate levels of security (service and technical)? l Who has the keys? Who has access to hardware and software? l Do I have an escalation chart for emergencies?

Managing the Student Account Primary Record of Financial Transactions l Tuition & fees l Room/Board l Other Institutional Charges l Payments l Adjustments

Managing the Student Account Electronic Records System l Includes Platform for Processes l Records & Registration l Tuition/Fee Calculation l Financial Aid Packaging l Payment Processing l Billing & Presentation l Many Other Processes

Student Account Systems & Invoicing What Do We Bill? l Mandatory • Tuition • Fees Charges: l Optional/Institutional Charges: • Housing/Meal Plans • Mandatory Student Health Insurance • Parking/Tickets • Other

Student Account Systems & Invoicing How Do We Bill? l E-Bills l Real – static periodic bills, accessible online Time – current status/dynamic billing l Traditional l Other? Method – static paper invoices

Student Account Systems & Invoicing Static E-Bills l Available securely to the student and others with delegated access. l Flexible if you allow an Opt In/Out (can reduce cost savings and increase administration costs). l More efficient and less costly, especially if mandatory. l Mailing addresses may not be updated as often. l May be able to track access.

Student Account Systems & Invoicing Real Time - Current Status/Dynamic Billing l Reflects account changes as they happen. l Keeps student/responsible billing party informed of current account status. l May reduce confusion around what amount to pay.

Student Account Systems & Invoicing Static Paper Invoice l Costly; inefficient. l Relies on mail service. l No confirmation of receipt. l Requires student to keep address current. l Not necessarily easily replicated.

Financial Aid is constantly changing and updating each year. Stay current by reviewing these websites: l Information for Financial Aid Professionals (IFAP): https: //ifap. ed. gov/ifap/ l l Publications/Blue Book (2013) Weekly emails/notifications of announcements l HESC – Higher Education Service Corporation: https: //www. hesc. ny. gov

Financial Aid Federal/NYS Financial Aid l Pell l SEOG (Supplemental Educational Opportunity Grant) l Iraq and Afghanistan Service Grant – Veteran/Military Benefits l Subsidized Stafford Student Loan l Unsubsidized Stafford Student Loan l Parent PLUS Loan l Perkins Loan l Nursing Loan l TAP/HESC Scholarships (Excelsior, STEM, AIMS, WTC, etc. )

Financial Aid Notification of Title IV Aid l You are required to notify students of the posting of their Title IV aid and there are two types of notifications a school must provide: Ø A general notification to all students receiving Title IV aid. Ø A notice when loan funds are credited to a student’s account.

Financial Aid Paying Prior-Year Charges l Federal funds may only be used to pay for the student’s costs for the academic year for which the funds were applied for. However, a school may use current-year funds to satisfy prior award year charges for tuition and fees, room, or board (and with permission, educationally related charges) for a total of not more than $200.

Financial Aid Department of Education Cash Management Rules Revised Fall 2015 The revision will particularly impact colleges and universities that offer bank accounts to students through agreements with financial institutions as well as those that use third-party servicers to process Title IV credit balance refunds. Several other changes to the regulations will impact all colleges and universities. The rules, with a few exceptions, were effective July 1, 2016. Since then ED has made some corrections effective in 2017. Review details at NACUBO. org: https: //www. nacubo. org/News/2016/4/ED-Corrects-Cash-Management-Rules

Financial Aid Delivery of Federal Funds l If the financial aid disbursements to the student’s account at the school creates a credit balance, you must pay the credit balance directly to the student or parent as soon as possible, but no later than 14 days after the date the balance occurred on the student’s account. l The law requires that any excess PLUS Loan funds be returned to the parent. However, the parent may authorize your school (in writing) to transfer the proceeds of a PLUS Loan to a student directly.

Refunds Financial Aid Credit Balances l l Must be available within 14 days: • From the time of disbursement or • First day of classes • Whichever is later By: • Direct Deposit • Paper Check • Debit Card

Refunds Credit Balances l Direct • Deposit: ACH into checking or savings account of an already existing bank account. l Paper • • Check: Can be picked up in office or mailed to the address on record. Some institutions charge a fee for replacement checks.

Refunds Outstanding Paper Checks l SUNY Institutions: New York State’s Abandoned Property Law requires certain entities to transfer abandoned money or securities to the New York State Comptroller’s Office of Unclaimed Funds. The Comptroller serves as the custodian of unclaimed funds until they’re claimed by the rightful owners. http: //osc. state. ny. us/ouf/reporters/ l Federal Financial Aid Refunds may NOT be escheated. Must be returned to the program within 240 days.

Payments Various Ways to Accept Payments l In Person - Cash, Check, Credit/Debit cards l Snail Mail, Lockbox - Checks l Online - ACH(electronic check), Credit cards, debit cards l Phone - Credit/Debit cards Not all institutions accept all types of credit cards and some no longer have a credit card machine in house due to the rigorous compliance policies.

Payments Credit Cards Chargebacks l Return of funds to a student/responsible billing party, that is initiated by the student/responsible billing party’s bank from a dispute by the cardholder. l To encourage compliance, banks may, at their discretion, charge your institution a penalty per chargeback. In addition, both Visa and Master. Card may assess severe fines against banks that retain merchants with high chargeback frequency.

Payments Credit Cards = PCI Compliance l PCI is a set of requirements designed to ensure that ALL companies that process, store or transmit credit card information maintain a secure environment. Essentially any company that has a Merchant ID. l Applies to ALL organizations, regardless of size or number of transactions. l Using a third-party company does not exclude you from being PCI compliant. It may cut down on your risk exposure but you cannot ignore PCI. l Cards include any debit, credit, and pre-paid cards branded with one of the five card association/brand logos - American Express, Discover, JCB, Master. Card, and Visa International.

Payments Credit Cards = PCI Compliance l Outsourcing does simplify payment card processing but do not forget, your institution must protect cardholder data when you receive it, and process charge backs and refunds. l Good Practice - request a certificate of compliance annually from a third party provider(s). https: //www. pcisecuritystandards. org

Payments Third Party Payments l Third parties are typically invoiced directly for the charges they have agreed to pay, but some third party entities may not require an invoice. l The liability for payment of tuition and fees ultimately lies with the student if a third party fails to pay all amounts as agreed. l Examples: • Private Source Scholarships • Vocational Rehabilitation –State and Federal • Pre-Paid/529 Plans • Contract Courses

Payment Plans/Education Loans Truth In Lending l Regulation Z, which implements the Truth in Lending Act (TILA) adds disclosure and timing requirements that apply to creditors (institutions) making private education loans for educational expenses. The HEOA (Higher Education Opportunity Act) requires that institutions obtain a self-certification form signed by the customer prior to them accepting the loan. l Congress enacted the Truth in Lending Act (TILA), 15 U. S. C. 1601 et seq. , to regulate certain credit practices and promote the informed use of consumer credit by requiring uniform disclosures about its costs and terms. Under TILA section 128, creditors must provide TILA disclosures to consumers in writing before consummation of certain closed-end credit transactions. https: //www. nacubo. org/News/2009/12/Truth-in-Lending-Act-Compliance-Checklist. Now-Available

Payment Plans/Education Loans Payment Plans that comply with TILA l l Must be paid-in-full by the end of the semester. Must be payable in four or fewer payments. l Must not charge interest. l Must not include a "finance charge”. l May include an "application fee" if charged to all applicants, regardless of whether or not the application is approved (make this payable before the application form is processed). l May include a fee for late payments.

Payment Plans/Education Loans that comply with TILA l Terms: • Must be paid-in-full in less than 90 days; or • Must be paid-in-full in less than 1 year and must not include an interest charge; l Fees: • May include an application fee; • May include a fee for late payments These rules apply differently to non-institutional creditors, including auxiliary service corporations and foundations. If a campus has agreements that allow an outside creditor to make TPPs, ELs or other non-Title IV loans to students, it should include language that clearly places the burden of complying with HEOA, TILA and Regulation Z (12 CFR part 226) on that outside creditor.

Payment Plans/Education Loans Payment Plans External l Outsources to third party companies: • Installment plans are offered interest-free and require an enrollment fee. Since these plans are not considered loans, no credit check is required. • automated payment plans that are deducted monthly directly from a checking account or paid by Credit/Debit card. Internal l Requires upkeep of enrolled students. l Requires record of missed payments and/or late payments: • Can be a costly alternative to external plans depending upon the number of enrolled participants.

Collections Managing Receivables Not everyone will pay their bills in a timely manner: l Consistent and Timely Billing l Make It Easy to Make Payment l Strong Customer Service l Enrolled vs. Not Enrolled

Collections Enrolled l Monthly billing l Reminders (Email/Phone calls) l Holds (Registration, Transcript, Diploma) l Registration Cancellation l Late Fees

Collections Registration Cancellation PROS: l Can be very effective. l Can free up seats for paying students. CONS: l Angry student and families. l Can impact retention. l Requires a lot of communication and special handling.

Collections Considerations for Cancellation When to cancel: l Before classes start l After classes start Who to cancel: l Past Due balance l Unpaid balance l Thresholds l Returned Payments

Collections No Longer Enrolled l Holds (Registration, Re-dmit, Transcript, Diploma) l Late Fees l Letters and/or Calls l Refer to Collection Agency/AG’s Office (SUNY) l Credit Reporting l Legal Action l Bad Debt Write-Off

Customer Service & Communication Service Philosophy l Key Factors: Ø School Culture, Current Administration, Partner Departments, Your team, Your experience and personal philosophy l Who is served: Ø Students and families Ø Other Campus Departments

Customer Service & Communication Where Does Customer Service Fit Customer Service is part of everything you do: l Starts with getting the transactions right. l It’s impacted by the structure of your location. l The tone is set upon admission. l People get ugly about money.

Customer Service & Communication Providing Service Incoming Contacts: l Department Email, Phone, Walk Up Inquiry Levels: l Level One – basic l Level Two – requires some special knowledge l Level Three – very complex l Hot Potatoes – usually angry Training: l On the Job Training, Reference Materials (including searchable procedures), Classes/Seminars

Customer Service & Communication The Best Service is Proactive Help Students and Families Help Themselves l Webpages l Communications l Leverage • • • Your Partners: Chancellors/President’s Office Admissions/Financial Aid Community and High School Partnerships

Customer Service & Communication l Online Bill/Student Account Information • Web Presence • Social Media • University/College Publications • Proactive Emails/Text Messages to Target Populations l Refund Check Notification l Registration Cancellation Warning l Hold Notice l Bill Notification

Customer Service & Communication Online Bill/Student Account Information: l Bill Display l Amount Due l Display Transactions l Financial Aid Pending l Title IV Permissions l Direct Deposit Set up l 1098 T electronic delivery l Checklists l Hold Information

Regulations Department of Education l Family Educational Rights and Privacy Act (FERPA) http: //www 2. ed. gov/policy/gen/guid/fpco/ferpa/index. html l US Department of Education Federal Student Aid Handbook http: //ifap. ed. gov/fsahandbook/attachments/1011 FSAHbk. Vol 4 Master. pdf

Regulations Other Federal Regulations l Federal Trade Commission/Truth in Lending: https: //www. ftc. gov/enforcement/statutes/truthlending-act l Gramm-Leach Bliley: https: //www. ftc. gov/tips-advice/business-center/privacy-andsecurity/gramm-leach-bliley-act l Red Flags Rules: https: //www. ftc. gov/tips-advice/business-center/privacy-and-security/redflags-rule l Fair Debt Collection Practices Act: http: //www. ftc. gov/os/statutes/fdcpajump. shtm l HIPAA (health charges, health professions loans, AOR : https: //www. hhs. gov/regulations/index. html l IFAP Information For Financial Aid Professionals: http: //ifap. ed. gov/ifap/ (Blue Book, Dear Colleague Letters, Federal Registers, Financial Aid Handbook, Federal Training)

Regulations Department of Treasury l 1098 T - Publication 970: https: //www. irs. gov/pub/irs-pdf/i 1098 et. pdf Ø Changes coming for 2017 which eliminate reporting of charges l Excess Cash Payments/Patriot Act: http: //www. irs. gov/pub/irs-pdf/f 8300. pdf Ø $10, 000 cash (IRC Section 6050 I) Ø Substantial overpayments (Title 31 USC Section 5332)

Record Retention Records Retention l NYS Archives Rule – http: //www. archives. nysed. gov/records/mr_retention. shtml. l Federal Financial Aid – 3 years after graduation (Problem for us > five and seven years in NYS). l Perkins has a few different rules. l Your own college policies – usually an office or employee who is the Record Retention Officer. A word to the wise - do not save anything any longer than you have to - you’ll avoid a lot of issues!

Questions You will never find a more helpful and generous group of people to work with, than your colleagues in NYSOBBA and NACUBO: l Join the NYSOBBA and NACUBO List-Servers l Peruse the websites http: //www. nysobba. org/ http: //www. nacubo. org/ Thank you for attending!