SOUTHEAST REDUCES BAD DEBT

Southeast Missouri State University finds a way to make most students pay.

In the past four years, the university has reduced from $360,000 to $58,000 in students' bad debt.

During fiscal 1995 which ended June 30, the school wrote off only $58,000 out of the $29.5 million in charges billed to students.

"That is pretty low," said Dr. Ken Dobbins, executive vice president.

In contrast, the university wrote off $360,000 in bad debt from students in fiscal 1991 out of $25 million in charges, financial records show.

An aggressive collection effort is a big reason behind a major turnaround in the university's undesignated fund balance, Dobbins said.

The goal is to get students to pay their school bills. "We do believe if students receive services, they should pay for them."

When Dobbins came aboard in 1991 as the school's chief financial officer, the undesignated fund balance in the operating fund was $584,000 in the red.

Now, four years later, the fund balance is more than $1 million in the black.

Dobbins said that is important because the undesignated fund balance serves as a rainy day fund for budget emergencies.

Even at $1 million, the fund balance amounts to less than 2 percent of the school's $59 million operating budget.

Dobbins said the financial woes in 1991 resulted from a sizable amount of student fees that went uncollected, state budget cuts and a costly early-retirement program for university employees.

The school, following auditors' recommendation, terminated the retirement program because of its cost and the fact that the program didn't comply with changes in federal law, Dobbins said.

The university attacked the bill-collection problem in several ways.

It set up a flexible installment plan. Students can pay fees in four installments over the course of the semester.

Students no longer have to pay in advance when they pre-register for the next semester.

And more students are charging their education to MasterCard, Visa and Discovery.

When Dobbins came to Southeast, the university was getting about $500,000 in credit card payments. This fiscal year, Dobbins predicts credit card payments by students will total about $4 million.

Chris Robertson, Student Government president, questioned the wisdom of using credit cards to pay for college or anything else.

But he said credit cards have become commonplace in society and on college campuses.

Students like having options on how they will pay for their college education, he said.

The university places students on probation and ultimately suspends them if they don't pay their bills.

The school works with students on financial probation in an effort to get the bills paid. For some students, it is a matter of securing more financial aid.

"We want to know what the problem is, and we want to help them," said Dobbins.

The system has worked. Southeast typically collects more than $300,000 in the fall semester and about $250,000 in the spring semester from students who pay up to avoid suspensions.

Southeast, on average, suspends less than 30 students a semester for non-payment.

The school was the first in the state to participate in the Debt Offset Program in which delinquent debts are withheld from state income tax refunds. The money is then sent to the school or other state agency to which it is owed.

Since entering the state program in 1993, Southeast has received over $47,000 from debts that previously had been written off.

Southeast even has its own bill-collection department. When all else fails, the university sends its bad-debt cases to a collection agency.

Southeast's debt-collection efforts help hold down student fees, Dobbins said.