Higher education institutions are investing more than ever in enrollment and recruitment. Nearly 70% of colleges plan to increase digital marketing budgets, with some institutions spending $1–2 million per month on advertising campaigns to attract students.

But there’s a critical part of the student lifecycle that many institutions still overlook: the financial experience after enrollment.

Marketing may bring students in, but financial clarity and a strong payment experience are key in  keeping them enrolled.

The post-COVID-era forgiveness around payment is by and large, over, and many institutions are revisiting a key moment in their billing and payments journey: pre-collections. It’s the last high touch engagement period from the institution before a past-due bill is sent to collections. An exceptional pre-collections approach has the ability to transform student persistence, not to mention your institution's student A/R.

When the systems used to manage past-due tuition balances are outdated or inefficient, institutions face mounting challenges—from growing student accounts receivable to overwhelmed staff and preventable student stop-outs.

Many colleges still rely on manual, reactive processes for pre-collections. In fact, 85% of institutions manage pre-collections in-house, often through fragmented systems and manual workflows.

Here are five warning signs that your institution’s pre-collections process may be in need of attention.  

1. 90+ Day Student Balances Are Increasing

One of the clearest indicators of an ineffective pre-collections strategy is the steady growth of balances that remain unpaid for 90 days or longer.

When institutions lack proactive engagement strategies, unpaid balances tend to age quickly. What begins as a small overdue payment can escalate into a long-standing account balance that becomes significantly harder to recover.

Growing 90-day balances often point to a reactive collections process rather than a proactive financial engagement strategy.

Without early outreach and clear communication, institutions lose valuable time to help students resolve balances before they become barriers to continued enrollment.

2. Student Accounts Receivable Exceeds 5% of Tuition Revenue

For most colleges and universities, tuition and fees account for more than 50% of operating revenue. This means that even small increases in unpaid balances can have significant financial consequences.

When student accounts receivable exceeds 5% of tuition revenue, the issue moves beyond billing inefficiencies and becomes a broader institutional risk.

Large A/R balances can disrupt cash flow, complicate financial planning, and increase pressure on administrative teams.

In a higher education environment already facing enrollment challenges and financial uncertainty, unmanaged student receivables can create additional instability for institutions relying heavily on tuition revenue.

3. Staff Spend Too Much Time on Manual Outreach

Many student accounts teams are forced to spend a large portion of their week tracking down unpaid balances.

Research shows that nearly three-quarters of institutions report staff spending up to half their work week chasing past-due balances.

Manual outreach methods—such as spreadsheets, individual phone calls, and reactive emails—slow down operations and create unnecessary administrative burden.

Instead of focusing on helping students navigate payment options and financial support resources, staff often become stuck performing repetitive follow-up tasks.

When billing teams are overwhelmed with manual processes, institutions struggle to deliver the kind of responsive, student-centered financial experience that today’s students expect.

4. Outreach Is Limited to Letters,Phone Calls, or Generic Emails

Many institutions still rely on traditional outreach methods like mailed letters, phone calls, or generalized emails to communicate with students about overdue balances.

The problem is that these communication channels no longer match how most students engage with information.

Students are far more likely to respond when outreach is delivered through modern, mobile-friendly channels, including text messaging and personalized reminders.

When outreach is limited to outdated communication methods, messages are easier to miss, ignore, or delay responding to.

As a result, balances continue to grow while institutions lose valuable opportunities to engage students early and help them resolve payments before financial stress escalates.

5. Students Don’t Have Flexible Payment Options

A lack of flexible payment options is one of the most significant barriers to resolving overdue balances.

When students cannot access flexible payment plans or structured repayment pathways, many simply delay addressing their balances because the payment feels unmanageable.

The connection between payment flexibility and student retention is clear.

• 34% of students without a payment plan are considered at risk of dropping out
• Compared to 15% of students who have access to a payment plan

Students who pay late are also twice as likely to lack support from financial allies, further increasing the likelihood that financial challenges will interrupt their academic progress.

Providing manageable payment options gives students a path forward rather than forcing them to choose between paying a large balance immediately or disengaging entirely.

Looking at the Full Picture

Pre-collections is often treated as a back-office process, but the reality is that it plays a central role in managing student A/R  and student retention.

Many institutions are still relying on manual workflows, outdated outreach methods, and limited payment flexibility. As balances age and administrative strain grows, these systems make it harder for both staff and students to resolve financial challenges before they become barriers to persistence.

The warning signs outlined above—growing 90+ day balances, rising student A/R, manual outreach, limited communication channels, and inflexible payment options—highlight how outdated pre-collections processes can impact institutional stability and student outcomes.

A student-first approach to financial engagement helps institutions address these challenges earlier, supporting both operational efficiency and student success.

For a deeper look at how student-first pre-collections can improve revenue recovery and help more students stay enrolled, explore the full report:

From Past-Due to Persisting: How Student-First Pre-Collections Boosts Retention and Revenue Recovery