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College of the Sequoias Board of Trustees Student Accounts Receivable March 10, 2014

College of the Sequoias Board of Trustees Student Accounts Receivable March 10, 2014. Student Accounts Receivable 5 year history. Student Receivables - Accounting. June 30, 2013: (Dr) Student Loans & Grants AR $3,669,958 (Cr) Allowance for Doubtful Accts $2,034,137

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College of the Sequoias Board of Trustees Student Accounts Receivable March 10, 2014

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  1. College of the Sequoias Board of Trustees Student Accounts Receivable March 10, 2014

  2. Student Accounts Receivable 5 year history

  3. Student Receivables - Accounting June 30, 2013: (Dr) Student Loans & Grants AR $3,669,958 (Cr) Allowance for Doubtful Accts $2,034,137 Net Student Receivables= $1,635,821 (part of GF Fund Balance) 2012-13 Activity to write off old receivables (> 1 yr): (Dr) Bad Debt Expense (now contra-revenue) $270,333 (Cr) Allowance for Doubtful Accts $270,333

  4. Student Accounts Receivable 5 year history

  5. What creates Student Accounts Receivables? Examples: • Enrollment • Health Fee • Pell Grants (no show, failing) • Student Representative Fee • Student Center Fee • Library Fines • Transit Fee • Non-Resident Fee

  6. What Creates Student Accounts Receivables? • Example of Pell Grant program – if a student does not show up (“no show”), or drops out, or fails a class • when a student is a “no show” (NS) to a class, the Department of Education requires the college to repay the aid that was issued to the student for that class. COS issues ½ of each PELL Grant on the first day of each semester, before “no shows” are registered. • Example of student fees – if a student fails to pay the District on an established payment plan.

  7. Student Accounts Receivable • External Auditor requires that COS write off any Student Accounts Receivable over one year old where the student no longer attends COS • The write off is an annual expense/contra revenue to the unrestricted general fund of approximately $200k-$400k • Beginning FY2012/13 the enrollment fee portion of the write off is posted as a contra enrollment fee revenue (this helps with our 50% law requirement) • The amount written off remains on the students accounts; if they need services from COS they would have to pay the debt or sign up for a payment plan • The write off is on the balance sheet as a contra-asset (Allowance for Doubtful Accounts) so our Student Accounts Receivable is not overstated

  8. Administrative Procedure 5055 E. Students who owe money to the College for prior or current semesters or terms will be denied registration unless the student has a current payment plan. Students who have defaulted on a payment plan will not be permitted to register until the full amount owing is paid. This AP, implemented in Spring 2012, gives COS greater authority collect on student debt.

  9. Other Options • Currently use Chancellor’s Office Tax Offset Program (COTOP) - if student is owed a state tax refund, COS is paid first (less a 25% collection fee) • Collection Agency – Currently use Sequoia Check Collections for isolated high dollar instances and returned checks • Debt less than one year old = 25% fee • Debt over one year old = 30-35% fee • High dollar instances = 35% fee • COS has the option to extend use of a collection agency to old receivables – would have similar fees

  10. Receivables due to Return of Title IV Funds (Pell Grant) – Fall 2013 Check requests are processed to return funds to the Department of Education

  11. Possible Options to reduce Pell Grant Receivables/Losses Possible options for changing the payout schedule: Instead of paying out grant 50% (appx $1388) first day of school & 50% mid-semester: • pay out in three intervals • delay first payment until no-shows are registered (but no later than 7th day of semester) • Put a portion on a bookstore credit 1st day of school, then pay remainder of $1388 after no-shows are registered

  12. Federal Student Aid Handbook • If your school disburses Pell Grant, Service Grant, TEACH Grant, Perkins Loan or FSEOG funds, but the student never begins attending classes, you must return the disbursed funds to the respective programs even if those funds were disbursed directly to the student • A school may not ignore information available to any office at the school indicating that a student failed to begin attendance • Schools must return funds disbursed to students who failed to begin attendance as soon as possible but no later than 30 days after the date that the school becomes aware that a student will not or has not begun attendance.

  13. QuestionsCommentsDirections

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