Students and families are increasingly favoring online options for paying tuition and fees, which may help lower costs for student financial services, according to a new report from the National Association of College and University Business Officers (NACUBO).
For its tenth annual Student Financial Services (SFS) Benchmarking Report, NACUBO used survey results from 377 NACUBO-member institutions and colleges, which included both two- and four-year schools, on topics such as student payments, credit balance refunds, staffing, and expenditures for student financial services during 2017.
Most notably, NACUBO found that students and families used electronic options to pay tuition and fees in 2017 much more often than they did just a handful of years earlier. While schools received 41.5 percent of student payments online in fiscal year (FY) 2013, that figure rose to 51.3 percent in FY 2017. Additionally, manual payment decreased from 37.5 percent in FY 2013 to 30 percent in FY 2015. Specially, paper check payments decreased from 32.5 percent to 26 percent, and in-person credit card transactions decreased from 6.5 percent to 5.3 percent from FY 2013 to FY 2017. NACUBO noted that e-check payments increased by 12.2 percentage points—from 27.5 percent in FY 2013 to 39.7 percent in FY 2017, and online credit card payments remained steady at roughly 20 percent over the same time period.
“This trend—increasing student payments received over the internet and decreasing manual payments—is important for many colleges and universities because greater use of online and automated processing systems may help lower [student financial services’] operating costs,” according to the report.
While schools with larger populations of students were more likely to receive payments electronically (64.7 percent in 2017), the report found that smaller institutions saw the largest increase in students paying tuition and fees over the internet, from 26.1 percent in FY 2013 to 38.6 percent in FY 2017—a 12.5 percent increase.
“This general move from manual to electronic payments is likely to continue,” according to the report. “Because an increasing proportion of U.S. adults bank online, it is not surprising that students and their families have increasingly used internet-based payment channels for postsecondary expenses.”
The study also discovered that schools have begun favoring electronic methods as well—institutions in FY 2017 issued 54.1 percent of credit balance refunds online through direct deposit, compared to 40.6 percent in FY 2013. According to the report, these methods are “generally less expensive for the institution and safer and more convenient for students.”
In addition to increases in online payments, NACUBO found that on average, colleges and universities have decreased their budgets for student financial services per full-time student by 6.2 percent—from $146 per student in FY 2013 to $137 per student in FY 2017. NACUBO suggested that overall higher education budget tightening, the increase in online services and payments, and rises in outsourcing may have contributed to this trend.
Publication Date: 10/1/2018