Once, the great debate in financial aid was to outsource or not to outsource. Now a third player has entered the field. It goes by the name of Automation. More and more understaffed colleges are looking to software to automate elements of the financial aid process in order to meet the needs of a quickly growing student population and improve office efficiency, safety and compliance.
However, there are still many colleges reliant upon outsourcing for processes like verification, refund calculations (R2T4), packaging and awarding. Below, we discuss the top five issues with outsourcing and how automation solves them:
1. Risk of Exposing Sensitive Information
Depending on what process is being outsourced, outsource consultants may have access to Institutional Student Information Records (ISIRs). The loss or theft of student or parent documents involved in certain processes – such as FAFSA verification – could put the school at great risk.
Schools are held responsible for financial security, regardless of who performed the financial aid functions. This means schools that outsource are accountable for errors that surface during audits, and in the event of a security breach, the school would be liable.
Why Automate? Software doesn’t desire to steal identities and is less vulnerable to error than a human. CampusLogic takes document security very personally. As such, our verification processing platform, StudentVerification, is enabled with extensive security measures including government-grade data encryption that protects uploaded documents.
2. More Upfront Work
While outsourcing may save time and hassle for the department in the long run, it often requires extensive set up on the front end. Migration of school-specific processes, forms and information to a servicer can be time consuming and costly for an institution. If a financial aid department is understaffed, allotting time and resources to setting up outsourcing is difficult and may be impossible.
Why Automate? Most financial aid software solutions are simple and easy to set up. StudentVerification, for example, integrates with all student information and imaging systems. The verification software-as-a-service (SaaS) can be launched in as little as a few days with the bulk of work accomplished by the software provider.
3. Quality May Suffer
It is more difficult for schools to QA outsourcers than an internal team, and some schools won’t QA an outside company’s work at all. This means the school won’t know about a problem until it’s too late, often after the mistake has been made repeatedly.
Why Automate? In-house teams still own the process when they work with software. Though software makes processes much faster, it is still under the control of financial aid admins and the director. Software like AutoReconciliation – a tool that reconciles COD and SIS data in almost no time – is even known to reduce the risk of error of an experienced, in-house financial aid team.
4. Lack of Control of Processes
Schools are often required to conform to the practices, forms and policies of the outsourcing company. This prevents the school’s financial aid staff from truly owning the process, increasing the risk of mistakes or miscommunication.
Why Automate? Your school may have a specific way of doing things that has proven effective for your unique student population. Outsourcing companies may take a one-size-fits-all approach or may not understand or be equipped to undertake your school’s methods. As a result your students will suffer, as may your school’s reputation.
5. Lack of Student Focus
Nobody cares about your students as much as you do. Outsourcing companies are not involved in schools’ culture; they do not see your students every day like you do. Furthermore, they lack the synergy and easy cooperation with other departments. Your in-house financial aid admins are a part of the larger team of school staff that is responsible for the institution’s success and is invested in the achievements of the student body.
Why Automate? Software solutions are tools. They allow a school to own the financial aid process without destroying the budget with overhead costs or creating headaches for the financial aid department. And they work within the systems your school already has in place. StudentVerification is branded for each school, so students and parents using it don’t even realize they’ve left the school’s website, creating a seamless and trusting user experience.
A Penny for Your Thoughts
At CampusLogic, we are passionate about creating SaaS solutions that solve problems for financial aid departments, but we are always interested in hearing about the experiences of those in the financial aid industry. Have you had successes with outsourcing or have you dealt with the issues above? Have you considered automated software?