Uni hires debt collecting firm

November 19, 1999

Middlesex University is employing a firm of debt collectors to chase unpaid tuition fees. University finance directors say the action is largely unheard of but could set a precedent.

Fee-paying students, usually postgraduates and overseas students, are given just two months to begin payments before their case is handed to a debt collecting firm. It is understood that the debt collectors also chase unpaid undergraduate fees.

Middlesex has confirmed that it employs Chase Debt Collectors of Manchester "throughout the university" as its agent working on a commission basis. Chase confirmed that it had "several" clients in the higher education sector.

Deborah Findlay, director of finance at South Bank University and a credit control expert, said that the use of debt collectors was being taken more seriously as an option for universities: "People are starting to do it," she said. Ms Findlay said universities were beginning to professionalise credit control as the full impact of unpaid tuition fees became clearer.

John Clements, director of finance at Oxford University, who chairs a working group of the British Universities' Finance Directors Group, said he had never heard of a university using debt collectors for student fees, "but the situation may change".

He said: "Before fees were introduced, student debts - usually restricted to library fees or rent - were never a significant problem for universities. But fees make up a substantial proportion of many universities' incomes, and non-payment is potentially a major problem."

It is understood that Middlesex's policy has caused administrative problems. A member of staff has complained that the university fails to employ internal sanctions before sending in the debt collectors.

Non-payers, it is understood, are allowed to attend classes, have work marked and sit exams. This, the academic complained, "has academic implications as well as cash-flow ones", because staff have spent time and resources attending to students who are not committed. It also prevents staff from producing definitive class or exam lists.

A spokeswoman for the university declined to comment on the effect of the policy on administration or about internal methods used to recover debt.

But she said: "For postgraduate students, full access to facilities is not allowed until the student has paid in full or has part-paid with agreement to pay the rest. If students are registered as 'fee query', they can be barred from library and computing facilities."

She added: "The university is committed to access and is sensitive and flexible to the students it serves. It constantly strives to balance issues of access and financial hardship with the need for financial viability."

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