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 |
