Managing finances as a college student can be challenging. Expenses add up quickly, and it isn’t always easy to stay on top of every bill. Your institution’s Student Accounts office is here to help by working with you to create a plan for meeting your financial obligations. They typically reach out via email, SMS, and phone calls to keep you informed. In some cases, if an outstanding balance remains unresolved after a set period, your account may be referred to collections—either managed internally by the institution or through a trusted third-party partner.

This guide is provided for informational purposes only and does not constitute legal or financial advice. Actual policies, processes, and outcomes may vary based on individual circumstances, state regulations, and institutional practices.

What is Collections? 🤔

Collections is the process that may occur when a balance remains unpaid for an extended period. Rather than immediately escalating to legal action, your institution might refer the account to a collections process. This means that either an internal team or an external partner will reach out to help you address the overdue balance.

Why You Might Want to Avoid Being Referred to Collections

While each situation is unique, there are several reasons to address your balance early:

1. Academic Repercussions 🎓

Some institutions may place holds on your enrollment or withhold your diploma when there are unresolved unpaid balances. Such actions can occur before or after an account is referred to collections.

2. Credit Score Impacts 📉

Being referred to collections may have a negative impact on your credit score. However, the exact effect can vary based on your overall credit history and the specific practices of credit reporting agencies. In some cases, a collection account could appear on your credit report for up to seven years, though the impact differs from person to person.

3. Increased Financial Burden 💸

Accounts in collections may accrue additional fees or interest, potentially increasing the total amount owed over time.

What You Can Do

1. Make a Payment Plan

Even if you’re unable to pay your balance in full immediately, many institutions offer installment plans that can make managing your payments more feasible.

2. Communicate with Your School

If you’re experiencing financial difficulties, it’s important to reach out to your Student Accounts or Financial Aid office as soon as possible. Early communication can often lead to manageable solutions and help prevent your account from being referred to collections.

3. Know Your Rights

Remember, you have the right to request a verification of your debt and dispute any inaccuracies. Contact your Student Accounts office to learn more about your rights and to discuss any concerns you might have.

Final Thoughts

While it is sometimes easier said than done, staying on top of your bills by checking your emails, texts, and account statements is key to avoiding complications associated with collections. By and large, your school’s goal is to work with you to find a solution that meets your needs and helps you maintain your financial health.

This guide is for informational purposes only and is not a substitute for professional advice. Policies and procedures may vary, so please consult with your institution for details specific to your situation.