Universities across the globe have confronted the need like never before to enhance their payment and digital capabilities.
The world of higher education and its communities, hit by new restrictions over the past year, were suddenly prompted to accelerate a host of new solutions in 2020. Contact-free everything was thrust to the highest importance, while the need for social distancing changed the environment of campuses everywhere. New modes of teaching, payments, communications and commerce arose—each confronting the push to survive in the sudden reality of online learning and remote transactions.
While the most visible impact of the pandemic year was on college communities, students and their families, urgent changes were also needed inside the institutions themselves.
“The rupture in the educational process has meant finding new ways to manage services, plan budgets, complete payments, reconfigure tuition plans and adjust for shifts in revenue,” observed Ellie Smith, Global Head of Digital Acceptance at Discover® Global Network.
Many of the adjustments were new, though much of the impact merely accelerated existing trends. Institutions from across the globe also grappled with the challenge of supporting enrollment and overseeing classes—either in-person or online—amid coronavirus outbreaks.
The effect of these pressures is rippling throughout higher education. New system requirements and payments expectations are already pointing to the need for expanded digital solutions.
Administrators are quickly discovering the need to be attuned to an array of evolving trends. With increasing flexibility and payments partners to address the expanding online landscape, they are working to attract, retain and accommodate students and their parents—allowing them to engage with the school now and in the future however they prefer. The need for a new approach can be found in each area of these institutions—from academics and research to finance and treasury.
Digital Flexibility Improves the Student Experience
With many institutions operating on legacy computer systems—built on the premise that students and administrators were present on campus for most transactions—advances in payments capabilities had not often been a priority in the education industry. That changed dramatically in 2020 as both local and international students were navigating classes and tuition payments remotely.
To respond to these needs, many universities quickly sought to incorporate new functionalities into their systems that would accommodate the flexibility and automation required. By tapping outside platforms and bringing robust solutions in-house, these institutions could provide the agility and remote administration needed for their suppliers, clients and students.
Among the leading providers of digital education payments solutions is Flywire, which has teamed with Discover® Global Network to deliver payments capabilities to higher education institutions. Launched in 2011, Flywire’s digital payments platform solves operational complexities for its clients in the higher education, healthcare, travel and business industries, while optimizing the payment experience for clients’ customers—such as student payers.
“These days, universities need automation in order to survive,” said Sharon Butler, Executive Vice President of Education at Flywire. “There hadn’t been a lot of innovation that went into education. So, when COVID-19 hit, they suddenly discovered they needed to hurry and get some technology out there.”
The way students prefer to make payments—from payment timing to transaction methods—can differ greatly among countries of origin depending on families and local culture. Allowing students to individually choose the number of installments, payment amounts or timing was seen as a critical option to maintain a trusting relationship between institutions and families.
A higher level of digital flexibility was also vital for universities to go beyond their current ability to juggle payments and receivables. New systems and expertise were required for continued operations in the face of closed campuses or remote working conditions. “Everything was affected,” Butler said. “Not just in the classroom. Even the interactions with the business operations and their partners have changed.”
International Students Are a Central Concern
The management of international students was an area of particular concern. The inclusion of students from various backgrounds and cultures has long been a key element of diversity sought by institutions to broaden the on-campus educational experience. For many universities, international students also provide a key source of revenue. Indeed, 87 percent of academic institutions said international students were “important” or “very important” to their financial health, according to a survey conducted by Flywire.1
Traditionally, though, international students have been less eligible for extended or flexible payment plans. But given the new environment, economic pressures globally have changed that, with schools seeking to incorporate more flexible and affordable options for cross-border students.
While a majority of international students were most concerned about obtaining a visa for their studies, the question of the affordability of tuition and fees was even more top-of-mind for 29 percent of students, according to Flywire.1 Faced with this level of concern, universities have sought to offer flexible payment options, including pausing fees and offering refunds, with 88 percent of institutions saying this flexibility for international students was either “important” or “very important.”1
To address these concerns and streamline the process, schools have increasingly looked to engage with families and respond to their needs. By deploying automated software that integrates back-office systems with student information, universities have increasingly been able to deliver real-time communication if, for example, student payments fall behind. In this way, schools can actively work with families upfront to discuss options going forward.
Forecasting Revenue and Planning for Liquidity
Similar to the flexibility for accepting tuition payments, universities also need to incorporate tools to forecast revenue and balance liquidity. By incorporating these tools, universities can develop the centralized ability to forecast future revenue and balance liquidity. This is particularly important as planning becomes more difficult.
“The question of cash flow is big,” Butler said. “Balancing expectations of how many new students enroll, whether existing students will stay, and how to deliver valuable education must be addressed and managed.”
Among the most significant lingering effects of recent events has been the impact it has had on university enrollment and student retention. One survey, conducted for Discover Financial Services, found that 48 percent of parents in the U.S. lost income during the pandemic, with 44 percent saying they could not afford to pay as much of their child’s education as they had planned.2
The impact of affordability on payments can be seen worldwide. A second study conducted by Flywire in the U.K.— which is aiming to attract 600,000 international students by 20303—found that it was not only the flexibility of payments that mattered.4 Sixty-nine percent of the students interviewed, from five countries, said they paid tuition online, and 81 percent said they would be “concerned” if they could not complete the payment through their university’s website.4 Further, 63 percent of students said a slow and painful payment process paints a negative view of their university.4
These questions of enrollment, retention and affordability must be matched with tuition payment schedules, many of which can change suddenly depending on family circumstances. Universities have discovered that tuition adjustments, whether overall costs or the flexibility of payments—including the possibility of prepayments— must be responsive to student needs. By centralizing payments into an integrated system, universities not only have the ability to address the needs of their community, but also better forecast their revenue and liquidity.
Looking to the Future
Each of these challenges was unexpected in its arrival and proceeded to challenge higher education in unique ways. With current trends in payments toward digital commerce and online transactions occurring worldwide—compounded periodically by unforeseen events—the need for payment agility will only increase. Understanding those needs, and staying aware of where the marketplace is headed, requires attention and flexibility. With the right partners and information, the digital solutions are at hand.
In many ways, these expanded capabilities on university campuses are helping pave the way to a new digital future.
“Institutions of higher education are at the forefront of accelerating these digital advances for students, families, and their business partners,” said Ellie Smith at Discover® Global Network. “We look forward to continuing to assist, helping to further collaboration and provide payment flexibility for our global partners throughout this space.”
References
1 Flywire, 2020. Save Overseas Studies: COVID-19’s impact on students, institutions, and the economy. Viewed 10th February 2021.
2 Discover Financial Services, September 2020. Nearly 40% of Parents Who Didn’t Plan to Apply for Federal Aid Now Say They Will as a Result of Covid-19 Pandemic. Viewed 11th February 2021.
3 HM Government, March 2019. International Education Strategy: global potential, global growth. Viewed 30th March 2021.
4 Flywire, 2020. Discover Ways to Attract More Overseas Students: A Payment Study for UK Universities. Viewed 5th March 2021.
The information provided herein is sponsored by Discover® Global Network. It is intended for informational purposes, and is not intended as a substitute for professional advice.
