The Paper Trail
The Ohio Bursars Association
Vol 10. No.2 - January
I hope your holidays were relaxing and enjoyable. The New Year typically means a time to review the old and plan for the new. While most of us probably think of this assessment in terms of our personal lives, it also relates to our professional lives as well. We have met many goals both within our institutions and within the Ohio Bursars Association, but many more are looming on the horizon.
Our association meeting on February 2nd will hopefully help us attain some of our objectives – or at least point us in the right direction. With every goal we must consider the impact on customer service. To help us with this evaluation process, we will have Barry Himmel from Signature, Inc. talk to us about how to provide exemplary customer service. After all, our customers are our business.
For the past several years, our institution has seen great leaps in the volume of alternative student loans. This rapid increase in student loans is a result of increasing tuition (due to decreasing state funding) and limited financial aid resources. Unfortunately, alternative loans are becoming a necessity for students to meet their unmet need. We will have a presentation on some of the issues related to alternative loans, and we will review some of the choices institutions have in selecting and advertising private loan programs.
We will also include
our traditional roundtable discussion where you will have the opportunity
to discuss other relevant topics with your peers.
headed to Miami (of Ohio) for Spring Conference!
Location: Miami University,
Georgia has been with Cleveland State University for six years. She was hired as Assistant Bursar for Cashiering, Cash Management, and Investment Accounting. Within a year of being hired, the University proceeded with plans to move the Bursar’s Office to a central location on campus. In the new location, the student accounts counter was combined with the cashier’s counter and Georgia assumed the additional responsibility for Student Accounts.
During the PeopleSoft systems upgrade two years ago, Georgia took on a temporary assignment as Associate Bursar of Systems. After the systems upgrade, and in conjunction with the implementation of a one-stop student service center, the Bursar’s Office was renamed the Office of Treasury Services and was reorganized. Georgia is now serving as the Associate Director. Her job duties include management of the computer systems for the Office of Treasury Services, the installment payment plan, third-party contracts, department billing, student billing, and student refund checks.
Prior to working at Cleveland State University Georgia worked in the Controller’s Office at Hiram College. She earned her BA degree in Business Administration through the Weekend College program at Hiram. Before starting her career in higher education, she served for fourteen years as the elected Clerk/Treasurer for the Village of Burton.
was in the military and she was born at Camp LeJeune, North Carolina.
Georgia fills her spare time with reading, flower gardening, knitting (mostly afghans) and weaving. She has three weaving looms and dreams of the day she can weave and read all day long.
Is Tuition Debt Dischargeable In Bankruptcy?
By Keith Weiner,
It is common knowledge that Perkins, Stafford and other similar loans are non-dischargeable in bankruptcy. The Bankruptcy Code gives these debts substantial protection from discharge. Not all students, however, use this type of financial aid to pay for their education. Some pay for their education, in whole or in part, by incurring charges on an open tuition account and making payment according to due dates established by school policy. Unfortunately, this is where the trouble starts since not every student makes timely payment and often tuition debt is incurred and carried on some form of revolving basis. The school is therefore vulnerable because unlike the Perkins/Stafford Loan the tuition debt can be discharged if the student files bankruptcy. The question this articles answers is how can schools insulate themselves so that the tuition debt is afforded the same protection under the Bankruptcy Code as a Perkins/Stafford Loan.
This question has been addressed by bankruptcy courts all across the country. The predominate view is that: for tuition to be non-dischargeable in bankruptcy, there has to be some kind of promissory note between the school and the student to establish a debt that is not dischargeable in bankruptcy. In the Sixth Circuit however, the need for a promissory note is not particularly required. The Sixth Circuit, In re Merchant, 958 F.2nd 738 (Sixth Circuit 1992), examined this issue and provided a test to determine if tuition is non-dischargeable in bankruptcy. The test provided three factors that must be met for tuition to be non-dischargeable. The factors are as follows:
1) The student must
be aware of the credit extension and acknowledge that the money is owed.
The difficulty with the Merchant Test is that it is fact based. Thus, depending on the particular facts of a case, the bankruptcy court could find that tuition debt is dischargeable. This is not to say a school can not protect themselves to prevent this from happening. So long as the school can establish all three factors the debt will be non-dischargeable. This places a great evidentiary burden on the school to establish the facts to support the Merchant Test. The question then becomes, “is there a better way to establish these three factors?”
Several bankruptcy courts outside of Ohio’s sixth Circuit have ruled that tuition debt can be considered an educational loan under the bankruptcy code and therefore, exempt from discharge if the student has signed a promissory note acknowledging the debt from its inception and agreeing to repay same. Since the Merchant decision was rendered in 1992, it is this author’s opinion that if confronted with this issue today the sixth Circuit would also establish the promissory note as the best way to avoid discharge in bankruptcy. The note should clearly demonstrate that the student is aware of a credit extension and that they have to pay it back. The note should have a fixed amount, whether per credit hour or semester, it should be clearly explained. Lastly, the extended credit has to be defined as a sum of money due to the school. In essence, the school should follow the three factors of the Merchant Test and stress those factors in a promissory note. The note can be a form contract that can be used over and over again. As with anything in law, it is always better to have it in writing!
OBA Board of Trustees - 2004– 2005
Downs, Bursar, Ohio University,
Note From Our Treasurer, Debora Jones:
John Rote, former bursar from the University of Toledo recently left the university. This action created a vacancy in the Four Year Public Representative Trustee. In accordance with OBA Bylaws, the Nominations Committee has nominated Deborah Bohanan, Coordinator, from The Ohio State University, to fill this position until a special election can be held at our upcoming Winter Meeting on February 2. At that time, the general membership will officially vote to fill the vacancy. If elected in February, Deborah will fill John’s original term concluding in spring 2006.
Please join me in saying goodbye to John. Although his tenure was short, he was instrumental in helping us develop an orientation book for new members joining the Association. All of us on the board wish John well in his future endeavors.
We are also extremely pleased that Deborah has agreed to fill the vacant position. Deborah has many years of experience at The Ohio State University and all of us look forward to working with her in the New Year. Thank you Deborah for your willingness to serve on the Board of Trustees!
When: February 2,
Where: Embassy Suites, Columbus
Nominee: Deborah Bohanan
Thought for the Term
“What We Know About the Impact of Financial Aid on Student Retention”
Presented by: Mark Heffron at the Noel-Levitz National Conference on Student Retention, July 2004
What successful colleges
of Higher Education Assistance Organizations (COHEAO) Annual Meeting
Association Winter Meeting
Louis Professional Development Workshop
Financial Services Conference
Association 15th Spring Conference
Development Group 19th National Conference for College and University
Bursars, Cashiers, Treasury Managers and Student Financial Services