During a recent alumni weekend, I met with the president of my undergraduate alma mater and we talked about how I might help them with a technological transformation to modernize their systems and operations. Our conversation stretched to how this is needed for higher education as a whole – something I am always game to talk about.
While classrooms have embraced hybrid learning models and data-driven student support, the experience of making payments for higher education can feel like it is stuck in the past. For many students (and their families), paying tuition bills feels more like AOL Instant Messenger than Amazon – outdated, slow and bureaucratic.
In an era of rapid digital innovation, higher education is in need of a technological transformation - especially when it comes to how institutions manage tuition billing and student payments. I have always said that institutions need to make the student financial experience as easy as possible to let them get on with their academic experience. A difficult financial experience can cause undo stress and lead to poor academic performance and this can have a direct impact on retention and revenue.
Students and families expect more - and they should
Families entering higher education today are largely digital natives and they expect seamless, secure mobile-first experiences on par with what they get from Amazon or Apple. They want the transparency of knowing what they owe, real-time updates, and frictionless interactions. Yet many campuses still rely on antiquated systems that aren’t designed for this and, moreover, don’t support all of the methods and financial vehicles families use to pay for higher education.
The result of not offering a modern experience is confusion, delays, and missed payments that lead to student attrition.
Outdated systems = Operational risk
Billing today is far more complex that it was even five years ago. And legacy systems are not designed to handle the complexity of today's global students and their payment methods.
Institutions are managing:
- International and domestic tuition payments
- Third-party sponsorships and 529 plans
- Continuing education and certificate/micro-credential programs
- Growing involvement from educational counselors (agents)
This not only frustrates students and families, but the finance teams managing it all. They are resorting to manual workarounds and spreadsheet gymnastics to reconcile payments. It is not only a drain on the institution's limited resources, it opens up security and compliance risks.
Successful payments lead to successful student outcomes
I have always said that payments aren’t just a student financial services problem – they are a student success issue. Missed payments and poor financial experiences lead to enrollment holds or drops. Students who fall behind financially often disappear silently, and this is very costly to the institution.
With modern and smart-enabled student billing and payment plan systems, higher education can make significant change with:
- Payment plans that update in real-time, adjusting dynamically as aid is applied, course changes are made and so on.
- Proactive communication on bills via in application messaging, SMS, or email to avoid falling behind and late fees.
- Mobile-first technology and a platform capable of catching students “on the go” from class to class to better engage them.
- School-branded collections tool to help those students that ultimately fall behind on their tuition payments and recover revenue potentially lost to attrition.
These are not just features - they are retention tools that are more critical than ever to higher education institutions.
Time for change: What does a modern higher education tuition payment experience look like?
An institution's tuition billing and payment experience should be modern, dynamic, and meet the payer where and how they want to pay.
Here is what it should look like:
- Unified payments platform: Bill for and collect payments from multiple student cohorts and payment avenues through a single platform – domestic, international, 529 disbursements, and third-party sponsors - all in one system. No more disparate portals! No more confusion!
- Dynamic & flexible payment plans: Allow for early enrollment to give the family more time to pay through “budget-to-actual” plans. With real-time integration, payment plan schedules update and adjust dynamically with the student account balance.
- Student-centric design: Talk to students and families in their local language. Flywire provides support for over 13 languages, while ensuring experiences live up to the expectations of the “Tik Tok Generation.” Provide students exactly and only what they need to know to complete their financial journey to get onto their academic journey
- Collections management integrated in the already familiar payment process: There will always be those students that “fall through the cracks.” Don’t send them off to collection agencies. Manage those accounts in-house with proactive communications and flexible payment plans, to help them pay their debt and continue their studies.
We don’t just go through technology transformations for technological sake, but for the betterment of the institution. The most important aspect of modernizing an institution's student billing and payment systems is about student success and institutional sustainability. Institutions that embrace modern billing and payment systems will:
- Improve cash flow
- Improve student satisfaction
- Increase student retention
- Offer more affordability options to those students that need it