Penn State Home Page Spotlight on Quality Improvement
 
More Information on CQI
Starting a CQI Initiative
Quality and Planning Events
CQI Programs
PIA Homepage
Financial AccessFinance and Business and Commonwealth Campuses

The Challenge: Offering the Best Financial Options to Pay for College

Historically, universities have expected students to have tuition and other charges such as those for room and meals paid in full by the first day of the semester. As the cost of higher education has risen, it has become more difficult for families and individuals to make this lump sum payment. The primary solution to this challenge has been to obtain a student loan, and student debt has also been increasing. Penn State formerly offered two payment options: the traditional lump sum payable by the due date, and a deferred payment plan with a fee which required the first installment by the bill due date and the remaining two installments over the subsequent two months. The Payment Plans CQI team was asked to review Penn State’s current payment options, how they were communicated, and what other alternatives were available, to ensure that Penn State offered the best options possible for families.

The Solution: Adding a Budgeting Option

A team was assembled with representatives from the offices of the Bursar, Student Aid, Admissions, and the Corporate Controller. The team took three parallel approaches to gathering data regarding the issue.

Parent/Student Survey Data    

“Does/would [Penn State’s current Deferred Payment Plan] meet your needs?
Response:

#

%

Yes it does meet my needs

127

9%

No the current plan does not meet my needs           

539

38%

Yes the current plan meets my needs, but I would be willing to consider other offering

547

38%

I don’t know           

211

15%

76% of families completing the survey were interested in another payment plan.

 

 

First, the team distributed an online survey about payment plans to Bursars at a comparable group of Association of American University (AAU) schools to find out what payment options they offered, and whether they were handled internally or by a third party vendor. Second, the team developed a brief online survey, with both multiple choice and open ended questions, to find out the payment option preferences of current Penn State students and parents. Finally, the team developed a Request for Proposal to explore options third party vendors would be able to offer, and the costs involved. The data combined showed that, among comparable universities (both public and private), there was significant use of alternative payment plans that included an increased number of payments throughout the semester or academic year, and that Penn State parents and students would prefer this option to the current alternatives.

Based on analysis from both a student/family satisfaction and financial perspective, the team recommended that the University retain its internally managed deferred payment plan, and also contract with a vendor to offer a budgeted monthly pre-payment plan. This budgeted payment plan was implemented starting with payments for fall 2007. The initial marketing plan targeted only incoming freshmen. However, continuing students were also welcome to take advantage of this plan. Although the number of Penn State families using the new payment plan was relatively small at first, a more robust program is anticipated once families become more familiar with this alternative. Team representatives will track the number of users of each of the payment options, and the impact of the additional payment alternative on student retention, student debt, and student and family satisfaction, as well as cash flow.


 

For more information about this initiative, contact Roseann Sieminski at rks1@psu.edu.
August 2007
 
 
Gary Schultz
Gary Schultz,
Senior Vice President
for Finance and Business/Treasurer
"We heard from our students..."more
John Romano
 John J. Romano,
Vice President for Commonwealth Campuses
"As a university we are committed to discovering..."more


Sponsors:
   Gary Schultz
   John J. Romano


Leader:
   Roseann Sieminski

Members:
   Kevin Armalay
   Ralph Hosterman
   Jane Kone
   Debbie Little
   Carolyn Saona
   Anita Sather
   Pat Smith
   Sue Wiedemer

Facilitator:
   Barbara Sherlock
   

 
© 2006. Office of Planning and Institutional Assessment   502 Rider II University Park, PA 16802-4819   (814) 863-8721   fax (814) 863-7031