Student Loans

Accounts Receivable

Each borrower is entitled to a six or nine-month grace period depending on when the loan was opened. Every borrower will be notified in writing when the grace period ends and when the first payment is due. Accounts' receivables are billed monthly. Payments are due the first day of each month. Payments received after the fifteen are considered late and late fees are accrued. Follow-up notices are sent on all uncollected accounts. Billing statements are printed on the fifteen and the first of each month.

Delinquent Accounts

An account that has reached 45 days delinquent, the academic records are tagged. Students are unable to register for classes or obtain transcripts until this delinquency is cleared.

When an account reaches the 60-day delinquency and the indebtedness is at least $50.00, debtor lists are submitted to the N.C. Department of Revenue for collection using the Set-Off Debt Collection Act, which provides for the collection of past-due accounts by offset against State income tax refunds' due debtors to the State. The Department of Revenue notifies the debtor that the University has a claim against the refund. The debtor must contact the University and satisfy the debt or the Department of Revenue will forward a check to the University less a collection assistance fee.

Collection

An account is considered delinquent if it is at least 90 days in arrears, and no arrangements have been made by the debtor to satisfy the obligation. The account is submitted to the Attorney General of North Carolina for collection. The Attorney General provides letterhead stationery on which a "Demand letter" is printed and forwarded to the borrower and carbon copied to the University employee. The content of the letter is provided by the Attorney General and will contain the name, address, and telephone number of the University employee to be contacted regarding the debt.

If an account has not entered into a repayment plan or clear the indebtedness, the University will seek legal action if the borrower is a resident of North Carolina. Court cost and sheriff fees are charged to the delinquent account. Judgments are entered against the borrower if the borrower was served.

If unable to obtain service on the borrower, this office will seek assistance with the IRS skip tracing service. Numerous telephone inquiries are made in an attempt to locate borrowers. If a borrower does reside at residence which sheriffs could not obtain service, this office will send an alias by certified mail, then seek judgment if mail is delivered. The department of education will remit letters to borrowers explaining what circumstances will result due to a noncompliance of loan terms.

Residents outside the State of North Carolina are sent to a contracted collection agency. The Attorney General has contracted with three collection agencies. The collection agency agrees to implement promptly thorough collection procedures acceptable to the client State agency to achieve maximum possible recovery from the debtors and any endorsers or sureties. These procedures should include a reasonable number of telephone calls, direct mailing efforts, and whenever necessary, skip tracing procedures. The collection agency will submit a check each month with a listing of debtors and monies collected. Vendor set off will be handled by the institution.

Returned Checks

Upon receipt of the returned check the student's record will be tagged, and a first class letter will be sent requiring payment including a $20 return check fee to be remitted no less than two weeks. Receivables are charged back to students' account along with the return check fee.

Uncollectible Accounts

A school may assign a defaulted Federal Perkins Loan or NDSL to the U.S. Department of Education if -

• The school has not been able to collect despite following due diligence procedures;
• The total amount of the account including outstanding principal, accrued interest, collection costs, and late charges, is $25 or more;
• The loan has been accelerated.

If the Department of Education accepts the loan, it will give the school written notification to that effect. By accepting the assignment, the Department acquires all rights, title, and interest in the loan. The school must forward any subsequent payments the borrower may make to the Department of Education.

On July 1, 1996, the Secretary approved to increase the write-off threshold to $5.00. Once these accounts are written off, the account is considered as paid-in-full. The account will no longer be considered as an asset to the fund, the account will no longer be counted in the institution's cohort default rate, if applicable, and the promissory note will be returned to the borrower marked as paid-in-full.

University In-house loans are written off. To determine if an account is uncollectible and should be written off, the loan is at least two years past due and all attempts which include the due diligence process has been exercised. The loans remain in the office and funds are collected if received at a later date. If the loan is satisfied in full, the tag is removed from the student's records.