Electronic Financial
Aid Refund
Disbursement Ramps
Up Efficiency at
North Central
Missouri College
When she became the
vice president of
administrative
services at North
Central Missouri
College (NCMC),
Sharon Barnett knew
the school needed to
make changes to its
financial aid
distribution system.
Although there were
more efficient
options on the
market, the school
opted to begin using
paper checks while
its IT department
investigated
much-needed upgrades
to its student
information system
and distribution
methods.
The Problems with
Paper
By using paper
checks, NCMC was
facing a number of
challenges — for the
administration and
students. According
to Barnett, the
process was
inefficient on both
a time and cost
level and was doing
more harm than good
in the area of
student
satisfaction.
To start, some
students of the
Trenton, MO, school
would claim checks
were not received.
In many cases, the
checks were lost or
sent to an incorrect
address. Rarely, the
claim turned out to
be fraudulent,
requiring another
level of paperwork.
Barnett cited an
example: An NCMC
student who claimed
to not receive a
check was instructed
to destroy the check
if it arrived as the
school was putting a
stop payment on it
and issuing a new
one. The student
proceeded to cash
the original check
at a retail location
— where the stop
payment was not
picked up — and went
on to cash the
second one as well.
Another problem the
school was running
into was that of bad
addresses. Students
frequently move
during their time in
college. As they
progress from
semester to
semester, it’s rare
that a
student makes the
necessary changes to
his or her personal
information with the
school’s
administrative
offices. When a
check is mailed to
the incorrect
address, it is
either returned and
voided or lost, and
a stop payment must
be issued.
The alternative is
to send the check to
the students’ home
address — or in
other words, to mom
and dad. Most
parents would
diligently ensure
their children
received their
checks as soon as
possible — but using
regular mail, it was
often days after the
funds should have
been received by the
student that the
check actually
arrived.
Time and Money
Time is of the
essence when it
comes to financial
aid distribution.
Title IV regulations
mandate that
financial aid funds
must be disbursed
within 30 days from
the time the school
receives the
funds from the
government. Although
the school made
every effort to get
students their
refunds in a timely
manner, delays
associated with late
receipt of checks
would sometimes
occur and even lead
to complaints from
students and their
parents.
"From a financial
perspective, just to
distribute the
checks was costly
considering printing
checks and envelopes
combined with
postage. That
doesn’t even account
for the labor costs
involved in cutting,
processing and
mailing out all of
the checks," says
Barnett.
Barnett found that
the time and
financial impacts of
using paper checks
went hand-in-hand.
Each check needed to
be hand-signed by a
board member. For
any lost or returned
checks, Barnett’s
staff members had to
monitor, handle and
manage the process.
Barnett further
explains, "The
reissuance of a
single check is a
lengthy process. We
must first issue the
stop payment, which
requires the
completion of an
online
questionnaire. Then
a new
check must be
issued. This takes
about 30 minutes per
check."
In 2008, NCMC went
through a major
upgrade in its
administrative
software. It was
time to begin
considering
paperless systems —
and eliminate the
need for paper
checks for good.
Direct Deposit
Among the options on
the market is ACH —
or automated
clearing house. With
ACH distribution,
funds are deposited
directly to each
student’s personal
checking account.
Using ACH,
administrators
collect each
student’s bank
routing number, bank
account number and
personal information
set. While ACH is
certainly a
paperless process,
Barnett was seeking
a more streamlined
and secure solution
for NCMC.
Between the need for
data collection and
the liability
associated with
storage of the
students’ personal
information, ACH
presented other
challenges. For one,
the manual data
entry involved
inherently holds the
potential for
inaccuracies and
mistakes, not to
mention it takes a
substantial amount
of time.
Additionally,
storing students’
personal information
would make the
school’s information
system an attractive
target for hackers.
Another challenge of
the ACH process is
that there is no
check number
associated with the
distribution. Funds
are deposited to the
account using the
students’ routing
and checking account
numbers. The school
has to issue a
pre-note to test
that the account is
valid before it can
issue the direct
deposit refund —
adding an extra
step.
Furthermore, in
cases when a student
doesn’t have a bank
account,
an alternative
method of
distribution needs
to be determined.
Searching for a
Solution
While NCMC was
looking for a
paperless financial
aid distribution
method, members of
the IT department
attended the
Heartland Campus
OneCard user group
conference hosted by
Heartland Campus
Solutions.
The OneCard System
is a Heartland
product NCMC had
previously installed
for student
identification and a
portion of its
on-campus spending.
The user group
conference provides
school
administrators a
forum to learn tips,
best practices and
how to optimize
efficiencies using
the product.
At the conference,
Alan Barnett, chief
information officer
at NCMC, learned
that Heartland was
offering a new
financial aid
product that
distributes refunds
to a virtual
checking account
linked to a
Discover® debit card
called "Acceluraid."
"When he returned
from the conference,
he told me Heartland
was introducing a
paperless,
integrated product
in Acceluraid. At
the time, I was
researching
solutions, and the
product I was
looking into just
didn’t seem to be as
well integrated as
this one, so I said,
‘let’s try it,’"
explained Barnett.
A Good Match
Beginning in January
of 2010, NCMC
implemented the
system on its
campus.
"Heartland offers
Acceluraid as a
standalone product
or as an integrated
solution with the
Heartland Campus
OneCard System —
enabling the
Discover debit card
and the OneCard to
draw from the same
financial account.
It allowed us to
start where we
needed to and grow
the program to suit
our students’
needs," Barnett
added.
With the OneCard
System already in
place at NCMC,
students already had
been furnished with
a financial account
at Central National
Bank (CNB), the
sponsoring bank of
the OneCard. Upon
the installation of
Acceluraid, students
expecting
reimbursement were
also given a
Discover debit card
that was linked to
their existing
OneCard accounts.
By incorporating the
financial aid
reimbursement into
the same financial
account, the school
expanded students’
purchasing power on-
and off-campus.
Students can now use
their financial aid
refunds for
on-campus services
such as printing,
copying and dining.
Plus, students are
able to use the
prepaid Discover
card for purchases
anywhere Discover is
accepted.
"We have the
accounts set up so
we can do our own
wire transfer
online. From the
student side of it,
they are happy to
get their money
faster. Usually it’s
same or next day,"
says Barnett. As for
changing her
students over to the
new method of
disbursement,
Barnett explains
Acceluraid has been
a hit — for the
majority of
students.
"Most of them are
very used to paying
with a card and have
taken right to it.
We did have a
handful of students
who asked for a
check rather than
the card. I felt it
would impact the
efficiency of using
this process, so I
explained the
spectrum of options
they now have," she
says.
Barnett went on to
explain that with
Acceluraid, the
students are able to
use the Discover
card for purchases
and ATM withdrawls,
to request a check
through the bill pay
system or transfer
funds from the
Acceluraid account
to another checking
account.
The Right Move
"Everything went off
without a hitch, and
I was absolutely
thrilled with the
results. I have more
than 25 years of
experience in higher
education
institutions, and
this was the
smoothest execution
I’ve ever
experienced for such
an undertaking,"
says Barnett.
By
eliminating paper
checks, NCMC quickly
sawa reduction in
the costs, delays
and operational
hurdles Barnett’s
team was running
into.
With the success of
the Acceluraid
implementation,
Barnett began to
examine other
methods to
streamline
operations on
campus. Already,
NCMC has begun
paying the salaries
of student
employees directly
into their
Acceluraid accounts
to be accessed using
their Discover cards
or OneCards. The
school is also
making students’
print and copy
expenses easy to pay
with their
OneCards. And
because all of the
purchases are
debited from the
same account, it
simplifies account
management for the
student — and the
school.
"Since we’ve been
using Acceluraid,
our students are
receiving their
refunds an average
of five to seven
days earlier than
they had been using
the previous check
system. Our
administration
has been able to
save money on
personnel costs,
check issuance and
reconciliation
issues caused by
delayed deliveries
and lost or returned
checks," explained
Barnett.
She adds, "Acceluraid
has proven to be a
much more efficient
process, and it has
really made a
difference for our
school and our
students."
