Too Much Work, Too Little Time - How Financial Aid Offices are Outsourcing to Improve Service to Students
Very few financial aid administrators got into the business of financial aid because they love regulations. While there are a few “reg hounds” out there (and thank goodness for each and every one of you), most of us entered the profession and stayed past the magic five-year mark because we wanted to work with students. When we can open the door to college and help a student overcome the financial obstacles that life throws in the way, we feel like we have done our job. The problem many administrators face is that the business of financial aid can actually prevent student interaction. Long days, long nights and long lines of students are just part of processing season, but increasing enrollments, regulatory changes and staffing constraints have created an almost insurmountable mountain of work. So what can you do?
Because of the peaks and valleys of the enrollment cycle, many colleges have looked to third-party service providers to offer support for financial aid office call centers, financial aid processing or compliance. Marie Johnson, Director of Student Financial Services at the University of Vermont, saw outsourcing as “an opportunity to benchmark practices, evaluate potential changes and free up staffing resources to devote to other activities.” While the UVM financial aid office staff was initially apprehensive about outsourcing, they quickly realized that it allowed them to be more attentive to the needs of students and families. Other administrators see outsourcing as a way of saving money. Bill Spiers, Director of Financial Aid at Tallahassee Community College, found that “by outsourcing Direct Lending reconciliation, TCC decreased the administrative burden on internal staff, ensured every student’s account was accurate and saved money. “
When phones are answered, the lines become shorter and the days are more productive for staff. Likewise, when verification files are processed in a timely manner, students are awarded sooner and that reduces call volume and shortens lines. “As director of financial aid for the second largest technical college within the Technical College System of Georgia, one of the best decisions I have made was outsourcing the verification process. We were able to award student’s aid faster than before so fewer students were dropped for non-payment, and we have seen an overall increase in the satisfaction of our students - new and returning,” Kristen Gast stated. At-risk students require more time and attention from financial counselors and outsourcing helps aid offices target services to those students which positively impacts retention and completion rates.
Outsourcing can produce great results. The likelihood of positive results increases when the chosen vendor has significant experience in higher education, when schools clearly communicate expected results and when financial aid office personnel are part of the purchasing process.
Experience in higher education and in-depth knowledge of federal financial aid programs are necessary attributes for third-party service providers. In order to build trust in your call center, agents must give accurate information to callers. Schools should clearly communicate expectations and build questions into the bidding process that will allow the school to determine the proficiency level of each potential vendor on financial aid related subjects. Other helpful tips for evaluation include:
Reference checks: Ask about current customers but also about customers who no longer use the vendor. Many schools request a complete client list. Calls are made to multiple current and former clients to determine satisfaction with the service, technology and cost.
Apples to apples: Make every attempt to evaluate apples to apples. Ancillary services and technological enhancements may be attractive but should not distract from the purpose of the proposal and the service needed. Vendors are usually happy to conform to a specified pricing proposal.
Security: Vendors will have access to private student data. Be sure to involve your school’s IT and compliance teams and evaluate the vendor based on their ability to protect your data.
Quality assurance: Determine how the vendor checks the accuracy of the work produced for the school. Are calls recorded? Can the school listen to any call? What percentage is escalated back to the school for follow up? For file verification services, ask the vendor to describe their internal quality assurance process. Be sure to ask about error rates from the previous peak season.
Once you have decided on a vendor and have negotiated a mutually beneficial contract, be sure to hold your new partner accountable. If you feel that the service level is not up to your satisfaction, document your concerns and contact your vendor immediately. The best provider will quickly correct errors and may even make helpful operational recommendations.
Also, keep in mind that when your school enters into a contract with a third-party servicer, you are obligated to notify the Department of Education of the agreement and update your participation agreement (see 34 CFR § 668.25). You will need to include the name and address of the servicer. In addition, the same regulation requires that your school notify the Department upon any significant changes in the school’s agreement or relationship with the third-party servicer.
Outsourcing works and can be managed just like you manage onsite staff. Just remember that successful partnerships rely on good communication and a common goal. When all eyes are focused on making sure students receive the best service possible, everyone wins.
Judith Witherspoon serves as a Senior Vice President at Edfinancial Services. She can be reached at JWitherspoon@Edfinancial.com.