Northern New Mexico College administrators are searching for revenue wherever they can find it, even from former students who owe the college unpaid tuition and fees.
Northern’s Vice President of Finance Domingo Sanchez informed Northern Finance Board members at the Aug. 27 meeting, that his department is looking to hire a contractor to collect unpaid dues from students with a balance.
“We have three groups that we contacted: Advantage Group, AllianceOne Receivables and New Mexico Educational Foundation Assistance,” Northern Financial Services Director Henrietta Trujillo said. “The New Mexico Educational Foundation Assistance is used by New Mexico Highlands University and was used by the University of New Mexico, I believe, but not anymore. We have a contact there, so we are most likely going to use that one, but we are in discussions with all three.”
Veronica Gutierrez, a sales executive with Advantage Group, described some of the options available to the college.
“If you are a client, we would collect the contact information of those who owe you money and we would take responsibility for collecting the payments,” Gutierrez said.
She said Advantage will notify credit agencies if people continue to be delinquent. That notice would remain on students’ credit history for years and if the bill is paid, the student will receive a letter from Advantage notifying the individual that full payment has been received. It is the student’s responsibility to fix their credit report once they have paid the college in full.
In extreme cases, Gutierrez said the company may garnish students’ wages.
“We have an in-house attorney so we can petition to have people’s wages garnished,” Gutierrez said.
In exchange for its services, Gutierrez said Advantage would receive a portion of the revenues they collect. She said Advantage charges clients 35 percent.
She said that means for every $100 collected, Advantage would keep $35.
Sanchez said failing to collect the dues on tuition and fees has an adverse effect on the college’s finances, since it is revenue Northern cannot claim and
cannot use to fund its operations.
Sanchez also said unpaid dues misrepresent the college’s financial situation because they are listed on the college’s financial statements as accounts receivable, which is an asset on Northern’s balance sheet.
“When people owe the college money and we can’t collect the payment, we have to keep that amount on the books,” Sanchez said. “Since it is a receivable, those uncollected payments are making the college appear it has more assets than it really has.”
Sanchez said the more overdue fees Northern can collect, the more accurate the financial picture is for the college.
According to Northern’s statement of net assets, the college currently has a little more than $1.2 million in receivables on its financial statements, but not all of it can be attributed to unpaid tuition and fees. Trujillo could not give an exact amount when she was asked what portion of that amount is because of unpaid balances.
Sanchez said his department is open to allowing students who owe the college money to still enroll, provided they pay back what they owe.
“In a prior year, if a student has a balance, we provide them with a payment plan to allow them to enroll,” Sanchez said. “In financial aid, there is some flexibility to pay prior balances, but not a big amount.”
Trujillo said in the past, the department has made exceptions for students who have a prior balance.
“When we see a student has a prior balance, for example, $1,000, and the student says ‘I have $900,’ we are not going to say, ‘Do not register,’” Trujillo said. “We come up with a standard letter and we make an agreement to pay the entire balance. However, if we have a student that has a balance of $3,500 and the student cannot pay any of it back, and we see returned checks, we review those cases on an individual basis.”
Sanchez also said he is looking at students with large unpaid balances and will make some exceptions for them.
“Another thing we are doing, if a student comes in and they owe $1 million in late fees, we are going to go back and waive some, if not all of the fees,” Sanchez said.
He said students who do not pay their bills on time trigger late fees that get added to their balance. If students continue to carry a balance, the fees can accumulate over time and students can owe much more than they otherwise would.
Sanchez said large balances discourage students from enrolling at Northern. He said he is concerned students may not attend the college to avoid making payments. He also said that for those past students, Northern’s policy is to charge $200.
“If they just accrue forever, they will never come back,” Sanchez said. “It is too high, so what we are saying is, ‘Pay $200, come talk to us and we will work with you on that.’ We want students to come back.”
To date, Northern is exploring options when it comes to collecting unpaid tuition and fees. Nothing has been decided.