HE Document

Getting Universities Paid

Presented by Neill MacKinnon

Higher Education:Student Debt Collection

Student Debt Collection - the facts and figures

Status & Accreditations

T: 0844 324 0660 @staintlW: www.stainternational.com

1© STA International

LUPC Framework Supplier

In 2013, STA won Framework Supplier status from the London Universities Purchasing Consortium, to provide debt collection services to its members, and members of other Consortia in the UK.

With this access to approved debt collection partners, members can make their choice without the need for an expensive and time-consuming tender process.

Treating Customers Fairly (TCF)

Financial Conduct Authority (FCA) authorised andregulated for accounts formed under the ConsumerCredit Act 1974 (amended 2006) – STAs ConsumerCredit Licence number is: 635875.

The FCA defines the debtor as the ‘customer’ andmandates 6 TCF outcomes that we must adhere to.Indeed, its number 1 outcome states: ‘Consumerscan be confident that they are dealing with firmswhere the fair treatment of customers is central tothe corporate culture.’ Our full-time training managerkeeps staff up-to-date on all related compliance issues.

STA International has a dedicated student debt collection and customer service business operating 8 a.m. through 8 p.m. Monday through Friday. For over 10 years we have collected tuition, accommodation, library, research and commercial debts; today partnering more than 80 universities and independent student accommodation businesses. In 2015, we collected c£11.5m of student debts and today we have c18k open student debts worth >£44m that we are pursuing.

Status & Accreditations

Credit Services Association (CSA)

The CSA is the official watchdog of the debt collection industry and, as members, we supporttheir stringent Code of Practice. In 2013, STA achieved the CSAs Company Accreditation when it exceeded the 70% threshold of collectors attaining their Collector Accreditation Initiative; a process that assesses each collector’s understanding of the regulatory, legislative and compliance framework.

ISO9001: 2008 Quality Accreditation

STA has ISO 9001 accreditation: certificate number FS591695. This internationally recognised standard is for

an organisation’s internal Quality Management. The term ‘quality’ refers to all those features of a product or service required by the client. An organisation’s ‘Quality Management’ refers to the actions it takes to ensure its products or services satisfy its clients’ quality requirements and complies with any regulations applicable to thoseproducts or services.

Insurance Cover

To fulfil its obligation of membership to the Commercial Law League of America, STA International has posted a surety bond of $1,000,000 to protect the creditors it serves.

We also have £5m insurance cover on each of: Professional Indemnity, Public Liability and Product Liability.

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© STA International2

Client Testimonials

“...I appreciate STAs consistent collection success performance over the 10 years we’ve been using them; and their online performance reports are easy-to-use, transparent and reassuring.

Greg Wray, Income Manager, City University

“...I particularly like STAs extended opening hours, and their latest telephone technology; together,

these give a high level of student contact that increases the money they collect for us.

Joanne Mills, General LedgerAccountant, University of Glasgow

“...QA Business School deals only with overseas students, and STA collect from many of these themselves. When they can’t, their extensive network of local agents

has collected from students in Sri Lanka, India, Pakistan, Malaysia, Kenya and Nigeria etc., much impressing me.

Marcus Stoneham, Credit ManagerQA Business School

“...I am always conscious of protecting Manchester’s reputation, so STA’s specialist knowledge and understanding of the HE market gives me great peace of mind when referring our student debts.

Michelle Bailey, Head of Transactional Services, University of Manchester

“...I really like the regular performance reviews with Neill, STAs account director, arming me with the information needed for my VC to prove

the cost effectiveness of using STA.

Carl Gibson, Finance Director, Edge Hill University

“...I am impressed with the knowledge and experience their collection team has with regard to various funding arrangements

available to students. They are able to engage, discuss and resolve queries to facilitate payment on a regular basis.

Marilyn Fletcher, University of Wolverhampton

“...mostly, I like the way they meet our challenges with solutions; recently we needed some help with current

accommodation students, but didn’t want a full debt recovery service. Neill, their account director, devised a very simple, but very effective “passive solution” of a letter/email service that generated a 40% collection success within 10 days.

Doreen Bailey,Head of Student Management,

Aston University

“...As the leading student accommodation provider, our needs are different, and STA has adapted its service to give us dual collection: with student and guarantor equally liable, they contact them simultaneously, speeding up our chances of payment. In addition they have customised their reporting

to suit our management information requirements.

Kelly West, Account Support & Collections Manager, Unite Group

A duty of care



Location, location, location

Our UK student tracing success is c65%; impressiveconsidering students are notoriously transient.Undelivered mail, and lack of contact, creates the need to trace the student to a new address. The tracing team is in-house, with access to all of the credit reference agency data needed to locate an electronic footprint.

With the unconfirmed address available, the validation process begins; making contact with near neighbours to legitimise the database findings. Once validated to a new address, or a living as stated address, the collection process resumes or begins.

Collection & Protection

On receipt of a debt, segmentation will consider: type, age, value, area, and data provided. With 70 workflows available, the selected workflow optimises collection success rates using the weighted value of each segmentation element.

Each workflow starts in the same way; regulationsrequire us to send our letter of instruction, and make our first payment demand. This instruction letter, followed by other letters, emails and SMS, each escalating in demand and outcome, meet regulatory requirements, and satisfy harassment rules, with careful scheduling. The collector will re-schedule or

Overview

Cost, collection success and customer care rank highest for university buyers; as seen at consortia, tender and user level. That’s why we maximise amicable recovery and minimise the need for legal recovery; reducing costs. Our 14 strong student collection team operates a shift system to cover 8 a.m. through 8 p.m. Monday through Friday; increasing collection success. Fully conversant with HE funding; the UKBA; Access to Learning Fund, withdrawal processes and documentation means universities receive minimal queries from STA; protecting goodwill and reputation.

Supporting the team is a Touch-Star power-dialler: telephone technology that increases contact rates threefold; Caller Line Identification that delivers a ‘local and familiar’ number to the student debtor, and SMS text messaging with its instant and friendly feel. Recording calls – except when taking debit and credit card details – is mandatory to meet monitoring and training requirements. Multiple payment methods include online payment gateway, telephone card and recurring card processing, direct debit, standing order and all traditional means of payment. Our PCI DSS compliance means prevention, detection and appropriate reaction to security incidents. We remit your collected funds every two weeks via BACS.

rescind these dependent upon the results of our most successful and frequent collections tactic: telephone contact.

Each call – inbound and outbound - starts with a security check to confirm we are speaking to the debtor and not their representative. Balanced call content seeks to get paid without applying undue pressure on the student. When a call reveals hardship or vulnerability, it transfers to our trained specialists to handle. A financial assessment is undertaken, advice given and, where appropriate, we set up an instalment plan that is revised regularly.

When all else fails

Legal action involves up-front costs and takes time, so we recommend it only as a last resort; less than 15% of student debts placed with us end up in any form of legal action. When it is necessary, our partner solicitors firm Hadfield & Co will issue a claim via the County Court Bulk Centre (CCBC) in Northampton, where charges are lower and they need less paperwork.

Unless contested, the claim will reach Judgment stage and, if the student still doesn’t pay, then we may recommend using High Court Enforcement Officers to settle the account. We may recommend other forms of enforcement on a case-by-case basis.

A duty of care

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Collection success rates

Collection success rates are different for home based students than for students based overseas. We havecollected c£54m or 45% of £122m placed from over 87k closed debts at UK addresses; c£15.6m or 34% of £46m placed from c19k closed debts at international addresses. These are the averages of our combined clients and vary from client-to-client depending on the age, location and profile of their student portfolio.

Overseas students

Much the way legal action is a last resort for UK-based students, so overseas agents are a last resort forinternational based students. In 2015, we collected from 125 countries and, of all the monies recovered, wecollected 79% of it from the UK, saving clients the cost and delay of using an overseas agent in the localmarket. Below, you can see the share of collection by continent, and three league tables of the Top 10 countries that we collected from for our HE clients:

What we collect

TOP 10 BY COLLECTED VALUE

1 Nigeria

2 China

3 United States

4 India

5 Germany

6 Pakistan

7 Greece

8 France

9 United Arab Emirates

10 Cyprus

TOP 10 BY # OF DEBTS PLACED

1 China

2 Nigeria

3 United States

4 India

5 Spain

6 France

7 Germany

8 Cyprus

9 Pakistan

10 Greece

TOP 10 BY PLACEMENT VALUE

1 Nigeria

2 China

3 United States

4 India

5 Malaysia

6 Pakistan

7 France

8 Greece

9 Cyprus

10 Germany

125

The top 10 countries where we collected student debt in 2015

countries collected from

79%

Africa & Middle East, 29%

Asia & Australia, 29%

North & South America, 10%

Europe (exc. UK & Ireland), 32%

Africa & Middle East

Asia & Australia

North & South America

Europe (exc. UK & Ireland)

In 2015, we collected 79% of all international student debt from the UK; saving you theadditional cost of using overseas agents.

The share of our studentcollections by continent

Responding to HE m

arket conditions



Non-academic student debts

With the OFT ruling that academic sanctions cannotbe used to recover non-academic debts, universitiesmust leverage payment in a different way. For currentstudents, our 10 day third-party demand letter willoften generate payment: when it does, it’s at littleor no cost to the university; when it doesn’t, then itswitches to our standard collection but at lower thanusual rates of commission.

Early-out arrears

The sooner that a student pays the less timeuniversity finance resources need to commit to themin the future. That’s why we provide extended hourstelephone calls to current students in the university’sname.

This transparent service benefits from high contactrates thanks to the accuracy of the data providedfor current students. With our evening collectors andtelephone technology we can take on a minimumfile of 300 students, completing the project in just3 nights, charging £5 per student. We ask studentsto pay the university, not STA, and we report anyqueries, disputes and misunderstandings.

Post-Judgment Surveillance

Designed for students with a County CourtJudgment (CCJ) served on them by STAs solicitor, the university itself, or its solicitor. CCJs have a shelf-life of 6 years; time for student circumstances to change; typically they seek employment, or try to open a credit line. Both could result in negative credit checks on the student, whose only recourse is to pay the Judgment debt.

Understanding and responding to new HE challenges

Six annual regional discussion forums plus our 24/7 online message board reflect the changes and challenges impacting our university clients. Knowing what challenges users have is the best way to find a solution and that’s what we did when the OFT stopped universities using academic sanctions to recover non-academic debts. It’s why we partner Finalysis to offer universities its full range of banking and treasury services. In 2016 we introduce credit control training to universities.

STA is not simply a debt collection agency but a shared service centre with resources to respond to university needs: Out-of-hours calling; Post-Judgment surveillance and confidential credit control on demand.

Every two years we retrace the student and, wherewe track them down, we start amicable collectionthat can lead to enforcement, if required. The onlycharges are for the tracing, plus commission onmonies collected, plus any enforcement action taken.

Commercial Debt Collection

Events, conferences and facilities hire are income streams for universities, but they involve credit risk. STA provides UK and International B2B collections, adding Late Payment Act interest and collection costs to all commercial debts; recovery of principal debt, interest and collection costs means a free-of-charge collection service for HE clients.

UK Commercial Credit Reports

Minimising the need for B2B debt collection meansassessing credit risk; that’s what our free-of-chargecommercial credit reports do for HE clients.

University Discussion Forums

Six regional forums a year let HE customers meetwith fellow universities to discuss the challengesand changes impacting their work. 71 different universities have attended the forums with a total of 748 delegates present.

Online Discussion Forum

Supplementing the six annual meeting forums is theonline message board where HE clients loginto exchange questions, answers and opinions onsubjects of their choice.

Responding to HE market conditions

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Your Debts Online - Dashboard Report:

A graphical summary of our collection success

Secure password protected access to web-based reports, costs and charges

Your Debts Online -

Performance Report:

A report of our collection performance by month andby country



Online reporting

Online reporting

Your Debts Online - Closed Debts Status Report:

A report of debts closed (a similar report is available for open debts showing your debts that are still being pursued)

Your Debts Online - Debt Detail:

A report of an individual debtor, a ‘drill-down’ facility from the Performance and Open Debts Status Reports , including the facility for you to submit electronic comments to your collector


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Your Debts Online - Fees by Debt Report:This report shows the net and gross debt, the amount collected and any collection, tracing or legal costs that you have incurred

Your Debts Online - Fees by Period Report:

This report shows all the costs you’ve incurred by your chosen time period



Our ClientsAbertay University

Aberystwyth UniversityArts University BournemouthAston UniversityBangor UniversityBirkbeck, University of LondonBirmingham City UniversityBrunel University, LondonCardiff Metropolitan UniversityRoyal Central School of Speech & Drama, LondonCity University LondonCranfield UniversityDe Montfort University, LeicesterEdge Hill UniversityFresh Student LivingGlasgow School of ArtGlyndŵr UniversityImperial College LondonKeele UniversityKing’s College LondonKingston University, LondonLancaster UniversityLiverpool Hope UniversityLiverpool John Moores UniversityLondon School of Economics and Political ScienceLondon School of Hygiene And Tropical MedicineLondon South Bank UniversityAlliance Manchester Business SchoolNewcastle UniversityNewman University, BirminghamNorthumbria University, NewcastleNorwich University of The ArtsNottingham Trent UniversityPlymouth UniversityQA Business School / University of UlsterQueen Margaret University, EdinburghRavensbourne CollegeRegent’s University LondonRoyal Academy of MusicRoyal Agricultural University CirencesterRoyal College of Music LondonRoyal Conservatoire of ScotlandRoyal Holloway, University of LondonSOAS, University of London


Southampton Solent UniversitySt George’s University of LondonSt Mary’s University, Twickenham LondonStaffordshire UniversitySwansea UniversityThe Open UniversityThe University of ManchesterThe University of NottinghamTrinity Laban Conservatoire of Music And DanceUnite Group PlcUniversity Campus SuffolkUniversity College LondonUniversity for the Creative ArtsUniversity of AberdeenUniversity of BathUniversity of BedfordshireUniversity of BoltonUniversity of BrightonUniversity of BristolUniversity of Central LancashireUniversity of CumbriaUniversity of DerbyUniversity of DundeeUniversity of ExeterUniversity of GlasgowUniversity of GloucestershireUniversity of HertfordshireUniversity of HullUniversity of KentUniversity of LincolnUniversity of LondonUniversity of Roehampton LondonUniversity of South WalesUniversity of St AndrewsUniversity of St Mark & St JohnUniversity of StirlingUniversity of Strathclyde GlasgowUniversity of SurreyUniversity of SussexUniversity of The Arts LondonUniversity of Wales Trinity Saint DavidUniversity of West LondonUniversity of WestminsterUniversity of WinchesterUniversity of Wolverhampton

Our clients

Getting Universities Paid

STA International is an award-winning debt collection agency, acting for more than 100 H&FE clients and over 1,000 B2B clients. For its Confidential Credit Control clients, STA operates in the client name providing transparent ledger management or outsourcing

services on a UK and International basis. STA also locates ‘gone-away’ debtors in its skip-tracing division.

STA International is in second-generation family ownership and founded in New York in 1955, still the group HQ. The group has other international offices in Chicago, Mexico City,

Shanghai, and Maidstone.

Neill MacKinnon BA (Hons)Client Services Director

T: 0844 324 0660M: 07946 649981E: [email protected]: www.stainternational.com

STA International is a trading style of STA International Limited, registered in England & Wales (registered no. 2893487)Registered and trading address: 3rd Floor, Colman House, King Street, Maidstone, Kent ME14 1DN

VAT no. 646003171. Data Protection no. Z7268646. Authorised and Regulated by the Financial Conduct Authorityfor accounts formed under the Consumer Credit Act 1974 (amended 2006) Consumer Credit License No. 635875

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