The modern college student is increasingly operating in a cashless society, according to research by Pew Research. However, the higher education industry finds itself straddling the line between legacy payment systems and new student expectations. There is significant backlash to cashless society, primarily based on security issues. Yet universities must still find ways to streamline student payment reimbursements – especially for research and athletic purposes.
Recent studies have highlighted this need in broader summaries of higher education financial trends. Read below for some of the latest:
The Higher Learning Commission, an accreditation agency based in the United States, notes that financial issues are top-of-mind for universities in 2019 and beyond. These issues are especially present when working with international students who do not have U.S.-based financial accounts:
“Recognition that new business models are needed to serve learners and sustain colleges and universities. Financial challenges will force institutions to do a “prosperity gap” to honestly and transparently recognize their strengths, weaknesses and strategically plan for the future.”
Generation Z is digitally native and adept at modern technology. They also have little patience for long periods between payments and reimbursements for incurred costs. Mobile payment apps are one format for addressing this issue, as described by Eric Spear at the Center for Digital Education:
“Taking the payment process online is a great way for schools to reduce the use of paper checks, offer a secure, convenient experience for students and gather data that can be used to make campus-wide decisions. This can even go beyond just tuition payments.”
Higher education institutions are battling challenges on the funding side, as well. Reduced funding from state and local governments has caused them to cut back on core educational expenditures, making it more essential to track all outgoing payments for cash flow purposes. Kevin M. Guthrie of Ithaka explains more:
“Many other colleges and universities have reduced core educational expenditures and cut other services in response to the decline in public funding, which has had an impact on the likelihood that students will complete their degree and certificate programs, in addition to further alienating multiple constituencies.”
Several universities in the United Kingdom are struggling with cash flow management, according to a report in Bloomberg. This has caused some of them to take out temporary loans to cover the difference:
“This all creates an inherent imbalance in how cash flows in and out of the institutions, which isn’t helping to ease the pressure on the finances of England’s universities (with Brexit partly to blame). One unnamed establishment has already had to go cap in hand to the regulator, the Office for Students, for a temporary loan.”
If your higher education organization is struggling to manage cash flow, or considering options to streamline reimbursement payments for research or athletic costs, contact us for an initial discussion.