Should Colleges Use Collection Agencies for Overdue Student Bills?

Colleges have many potent options for getting students to square their accounts.

(Image credit: allanswart)

Question: I hear that some public colleges turn over the overdue bursar accounts of current students to private collection agencies, which sometimes charge fees as high as 30% of the balance due. This strikes me as unnecessary and usurious. What do you think?

Answer: I agree, when this is done to current students or those about to graduate. Colleges have numerous potent alternatives for getting students to square their accounts—for example, not letting them register for the next semester or remain in a college dorm. If the student is a senior about to graduate, the college can withhold the diploma or refuse to issue an official transcript of grades.

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Knight Kiplinger
Editor Emeritus, Kiplinger

Knight came to Kiplinger in 1983, after 13 years in daily newspaper journalism, the last six as Washington bureau chief of the Ottaway Newspapers division of Dow Jones. A frequent speaker before business audiences, he has appeared on NPR, CNN, Fox and CNBC, among other networks. Knight contributes to the weekly Kiplinger Letter.