E. UNIVERSITY FINANCIAL SERVICES
E-21-5
Collections and Write-off Policy for Student Accounts and Loans Receivable
Revision Date: November 22, 2021
Page 1 of 3
Collections and Write-off for Student Accounts and Loans Receivable
I. Purpose
To set forth the University’s procedures by which the University will reserve and
potentially write-off student accounts and loans receivable. Student accounts
receivable consist of unpaid balances for tuition, mandatory fees, course and program
fees, housing fees, dining fees, miscellaneous fees, and institutional loans (short-term
and long-term).
II. Policy
A. Establishment of Bad Debt Reserve Amounts
1. Student Accounts Receivable
Annually, Student Account Services will calculate the amount of bad debt
reserve for student accounts receivable that should be established on the
University’s financial records. The amounts will be calculated based upon
review of aged accounts receivable and historical collection rates, net of
recoveries.
2. Student Loans Receivable
Annually, Student Account Services will calculate the aging of past due
student loans receivable and provide data to Accounting and Financial
Reporting Services to calculate the amount of bad debt reserve. The
amounts will be calculated based upon review of aged accounts receivable
and historical collection rates, net of recoveries.
B. Unpaid Student Accounts and Short-Term Institutional Loans
1. Account statements are provided once each month.
2. A late fee of 1.5% on the unpaid balance will be assessed monthly.
3. Students enrolled in the Installment Payment Plan for the fall or the spring
semester, in good standing with the terms and conditions of the plan, will
not be assessed a late payment fee. Students not in good standing with the
terms and conditions of the plan will be dis-enrolled from the plan and
assessed a 1.5% late fee on the unpaid account balance.
4. A financial hold will be placed on a student’s record approximately sixty (60)
days after the account becomes past due. University student services such
as transcript requests, registration, or diplomas may be denied until the
account is paid in full or other satisfactory arrangements have been made.
5. Accounts with unpaid balances of $100.00 or more and past due at least six
(6) months will be sent a final demand notice. This notice will state that the
account will be referred to a collection agency within thirty (30) days if not
paid in full or other satisfactory arrangements have not been made.
6. If no response is received within thirty (30) days of this notice, the account
will be referred to a collection agency or the Kentucky Department of
Revenue.
7. If an account is referred to the Kentucky Department of Revenue for
collection, a notification is sent requiring payment in full, payment
arrangements, or formal appeal with documentation within 21 days.
8. Accounts that are past due may be written-off the student system and
charged against the bad debt reserve account at least annually with the
following considerations:
a. Accounts with unpaid balances past due at least three (3) years or more
not referred to a collection agency or the Kentucky Department of
Revenue.
E. UNIVERSITY FINANCIAL SERVICES
E-21-5
Collections and Write-off Policy for Student Accounts and Loans Receivable
Revision Date: November 22, 2021
Page 2 of 3
b. Accounts with unpaid balances past due less than three (3) years with
exceptional circumstances as determined by the Director of Student
Account Services and approved by the Treasurer:
1) Death, as documented by certified death certificate
2) Total or permanent disability, as documented by a
physician
3) Incarceration, with documentation
c. Accounts with unpaid balances less than $200.00 and past due less than
three (3) years.
9. Financial holds will be maintained after the write-off for accounts with write-
off amounts of $200.00 or greater. The write-off of the unpaid balance from
the student account does not constitute a discharge of the obligation.
10. Accounts may be reactivated upon students’ requests for services (e.g.,
transcripts, enrollment, etc.) or if recovery becomes apparent.
C. Unpaid Long-Term Institutional Student Loan Accounts
1. Account statements are provided once each month when the loan enters
repayment status.
2. Interest and or late penalties are assessed according to the terms noted on
the promissory notes.
3. A financial hold will be placed on a student’s record approximately sixty (60)
days after the account becomes past due. University student services such
as transcript requests, registration, or diploma may be denied until the
account is paid in full or other satisfactory arrangements have been made.
4. Accounts with unpaid balances of $100.00 or more and past due at least six
(6) months will be sent a final demand notice. This notice will state that the
account will be referred to a collection agency within thirty (30) days if not
paid in full or other satisfactory arrangements have not been made.
5. If no response is received within thirty (30) days of this notice, the account
will be referred to a collection agency.
6. If an account is returned by one collection agency, the account may be
referred to a second collection agency.
7. Accounts that are past due may be written-off and charged against the bad
debt reserve account at least annually with the following considerations:
a. All collection efforts have been exhausted
1) Internal
a) Initial bill and past due notices attempted
b) Financial holds placed on the accounts
c) Address searches completed
2) External
a) At least two (2) external collection agencies have closed and
returned the account
b) Litigation attempted, if applicable
b. Accounts with unpaid balances past due at least three (3) years or
more
c. Accounts with unpaid balances past due less than three (3) years or
more with exceptional circumstances as determined by the Director of
Student Account Services and approved by the Treasurer
1) Death, as documented by certified death certificate
2) Total or permanent disability, as documented by a physician
3) Incarceration, with documentation
d. Accounts with unpaid balances past due less than $200.00 and past due
E. UNIVERSITY FINANCIAL SERVICES
E-21-5
Collections and Write-off Policy for Student Accounts and Loans Receivable
Revision Date: November 22, 2021
Page 3 of 3
less than three (3) years.
8. Outstanding principal, interest, late fees, and collection costs, if applicable,
will be written off by performing transactions in the billing service system
(Heartland ECSI).
9. Detail of all accounts written off will be maintained by the billing service and
made available if recovery becomes apparent.
10. Financial holds will be maintained after the write-off for accounts with write-
off amounts of $200.00 or greater. The write-off of the unpaid balance from
the borrower’s account does not constitute a discharge of the obligation.
