The End of Transcript Holds: Rethinking Tuition Payment Strategies

Amy Jenkins
November 27, 2023

While transcript holds were no one’s first choice, for many schools they were an effective way to get students to pay unpaid balances.

But that option is largely going away.  And we think that’s mostly a good thing.

First of all, transcript holds aren’t that effective. 

Some students don’t care if they get their transcript and some students find ways around them. They might secure an unofficial transcript, transfer credits from another institution, or temporarily sidestep the issue while continuing their education. It can turn into a bureaucratic game of cat and mouse that creates frustration rather than incentives for students to pay their tuition bills.

Add to that: transcript holds disproportionately affected low-income students and those who were already struggling to make ends meet. Instead of encouraging financial responsibility, they sometimes push these students into even more precarious financial situations, perpetuating a cycle of debt.  

So - what’s next?

With the fading prominence of transcript holds, colleges are now faced with the challenge of finding alternative ways to ensure timely payment of tuition fees. This shift can ultimately be an opportunity for schools to rethink their approach to student finances and create a more student-centered, supportive system. 

Colleges can focus on students from the start, rather than punishing them at the end.  

Here are a few things you can consider to improve your collections upfront:

Cost Transparency: A good net price calculator, often coupled with counseling from financial aid counselors, can go a long way in helping students to make good choices about school and how to budget for their expenses.  Eliminate as many surprises as you can by providing students with information about direct and indirect costs, as well as making sure they see all the aid available to them.

Clear Communication: The only thing worse than an unread email (and less than 50% of students read the emails their colleges send them) is an unclear email.  Every email you send about a bill should be personalized, targeted, timely and have a clear call to action.   

Better Bills: Clarity doesn’t end with the email.  Students often lament how confusing bills are and a majority of students that paid tuition late cited confusion about their bill as a main reason.  Your students will pay faster when they understand what they need to pay.

Financial Literacy: It is true that implementing mandatory financial literacy programs can equip students with the knowledge and skills they need to manage their finances effectively. These programs can cover budgeting, loans, scholarships, and other financial resources available to them.  But financial literacy doesn’t have to (and shouldn’t!) stand alone.  Incorporate bite-sized financial literacy into your billing and payments flow so that students can access the information, resources and knowledge at the moments they need it the most. 

Flexible Payment Plans: Offering flexible payment plans that allow students to spread their tuition payments over the course of a semester can ease the burden of paying large lump sums at once.  For these to be effective, they need to be easy to set up.  Payment plans that allow for students to save their payment information or include auto-pay are the most successful.

The discontinuation of transcript holds as a consequence for unpaid tuition fees marks a pivotal moment in the evolution of higher education finance. It is a step in the right direction, away from punitive measures and towards a more supportive approach to student financial success. But that doesn’t mean it is going to be easy.  To be ready for this change, schools may have a lot of other changes to put in place.  And if you are ready, so are we!

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