United States

case studies
united states
efficiency optimization

Efficiency and control of student payments increased

US community college eliminates manual processes while offering student payment choices

The challenge

A community college system in the Southwest offers 250,000 students, spread over ten diverse campuses, a wide range of occupational training programs and academic degrees.

For a major U.S. community college system with ten geographically and demographically diverse campuses, processing refund payments to students had become a real headache — for both students and administrators.

Despite advances in electronic payments, the school continued to issue checks for all student payments related to financial aid, student loans, scholarships and tuition refunds. It processed and printed checks at a central location, which were then sent to the campuses for review and mailed to the students.

With more than 100,000 of such disbursements each year, manual and paper-intensive check distribution processes were eating up valuable staff time, to both issue checks and respond to inquiries about them, and generating significant check printing, handling and mailing expenses.

Students were asking for a faster, easier way to get their payments, and the school district wanted to find a more efficient and cost-effective way to deliver payments to them.

At the same time, the school had to ensure that changes to its payment process would meet strict Title IV regulations that outline, for instance, how quickly students must get paid and how they can be paid. The colleges also wanted to ensure that their students would not incur unnecessary bank fees or other charges.

The solution

The college chose a convenient one-stop solution from Citi that includes electronic payment options in addition to checks. More important, the Citi solution eliminates in-house check writing for student payment altogether. Instead, Citi processes and disburses all payments.

The school's goal was to convert as many payments as possible from checks to electronic payment methods; however, Title IV regulations prohibit blanket conversion to electronic payments and require schools to offer students payment options. Therefore, Citi created an online enrollment site where students select their preferred payment method: direct deposit to a checking account, a Visa® branded prepaid card that can be loaded with the amount of their payments, or a check.

As part of the rollout, Citi helped create a marketing campaign, which included e-mail announcements, web banners, handouts, flyers, posters, FAQs and press releases, to spread the word among students about the new payment options. The materials, among other things, highlighted the convenience and expedience of electronic payments and how to sign up for them. Alliances also were formed with faculty, ombudsmen and college management to get the word out to students and staff. In addition, Citi helped train financial aid, bursar and other key administrative personnel on the new payment processes so that they could assist students and respond to their questions.

In three months, all ten campuses migrated to new, streamlined processes. Now, instead of issuing tens of thousands of checks each semester, the college sends a single daily data file to Citi with beneficiary details and payment information. Citi handles the rest, distributing payments directly to students based on their payment method of choice. In addition to tracking and managing undeliverable funds to meet Title IV requirements, Citi also provides around-the-clock customer support to students, handling inquiries about the status of their payments.

The result

The change was a win-win for students and the college — and a sustainable, green solution. It eliminated the manual processes once performed by staff and reduced the amount of paper work — and paper — generated to issue payments. Regardless of how students choose to be paid, the administration of those payments is 100% electronic.

In addition, the new payment platform makes it easier to identify and track fraudulent activity. In fact, during the nine months of the new payment program, the school identified nearly $350,000 in fraudulent activity.

Last but not least, students have embraced the new direct deposit and prepaid card options, which allow them to get their funds faster and eliminate the hassle of having to cash or deposit checks. By the second semester the program was in place, 50% of students on all ten campuses had converted to the faster, more direct electronic payment methods offered by direct deposits and prepaid cards. Based on the issuance of 100,000 disbursements per year, that's a shift that adds up to big cost and efficiency savings.