Guest Blogger: Nathan Lemon – The High Cost of Checks
What makes issuing a check so costly for these schools? Some points to consider:
- Administrative time required by those involved in getting the checks issued
- Postage required for issuing multiple checks throughout the school year
- Support resource required to hand out the checks (if they don’t mail them out)
- Returned checks – Students moved and they don’t update their address information with the school
- Risk of non-compliance – Resource time, availability of good information and mailing time can impact a school’s ability to meet state and federal disbursement requirements
What else is missing from this list?
Obviously, any electronic method (Debit cards, direct deposit, etc) will speed up the process and will almost always be cheaper for a school. Given that the majority of students don’t have a direct deposit option (i.e. checking accounts), a debit card solution makes perfect sense.
A prepaid debit card program can reduce or eliminate the costs as compared to cutting checks. Here’s how:
- Electronic disbursements allow institutions to streamline their processes and maximize the time of their resources
- Cards are issued prior to a disbursement and they are reloaded electronically, paying for postage only once is an immediate savings
- Once the card is in the students hand, returned mail becomes virtually non-existent
- No more waiting to get the checks to the students, making compliance that much easier to achieve
Nathan Lemon is Director of Higher Education for Springbok Services and will be a frequent guest blogger. Please visit Nathan’s blog at http://www.highereducationdisbursements.com
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Refund Solutions for Higher Education – Why Use Prepaid?
Colleges and universities can now conveniently disburse funds such as financial aid, work study payments, payroll and scholarships by the use of a prepaid debit card.
Converting from paper checks to electronic funds transfer not only streamlines the refund process, but makes it more economical for the students and the institution. Students, parents and school administrators all benefit from faster, less costly and more secure distribution of funds.
Top 5 Benefits to the Institution:
- Significant cost reduction – Free to Institution
- Reduce administrative time – No phone calls and inquires about lost or stolen checks
- Easy to implement – No internal technical resources required
- Simplified payment process – Electronically send funds immediately
- Enhance “Green” Initiatives – No more paper checks
Top 5 Benefits to the Student:
- More Security – Safer than carrying large amounts of cash
- Immediate access to funds – No need to wait for check to be mailed
- Easy to Use – Can be used anywhere Visa or MasterCard is accepted
- Less expensive – No need to pay check cashing fees or to have a checking account
- Increase Financial Maturity – No more NSF’s or overdraft charges as with checking accounts
Students will appreciate the speed and convenience and schools will reap the rewards of an efficient funds disbursement process. Please let me know if you would like more information on how to use Prepaid Debit cards to help with student refund disbursements.
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