Myths and truths about school default
Posted: Sun Jan 19, 2025 9:09 am
As educational institutions provide a social service, many people are unsure whether or not they can blacklist a student who is in default.
Despite this characteristic, private schools, colleges and universities continue to be businesses. This means that, in order to remain financially stable and healthy, they need to generate profit and control defaults.
Without financial resources, the institution cannot fulfill its main mission – which is to offer quality education.
When it comes to school default, there are many preconceptions. One of them is that the institution, due to its social role, cannot register defaulting students or their guardians with the SCPC.
This is a myth. PROCON-PR understands that including the cash app database is not considered illegal. Delayed payment of monthly fees is considered a breach of the educational services contract. This is governed by the Consumer Protection Code (CDC) Law 8,078/90. Therefore, it is up to the institution to choose the most efficient means of collection.
If you don't know where to start, keep an eye on the following lines. I will explain what negative listing is, how to blacklist a delinquent student and other preventive measures.
What is negativity?
Let's start with the basics and understand what a negative credit rating is . When we blacklist a defaulter, we inform the credit bureaus that they have not complied with a financial agreement. In the case of educational institutions, the commitment would be to pay the monthly installments on time.
The negative rating is reflected in the score , which is a consumer's credit rating in the market. The fewer points a consumer has, the greater the risk of becoming delinquent in the next 12 months.
The bureaus, in turn, are a type of financial database , in which we make the records. The best known are: Boa Vista / SCPC , Serasa and SPC.
The registry works like this:
You inform the defaulter's CPF to the bureau;
He will receive, by mail, a document informing him of the amount of the debt and what to do to pay it off. We call this document a “Notice Letter”;
After receiving it, the debtor will have a period of time to contact the institution and negotiate the debt.
This charge can be made by the institution's own finance department or by a specialized company. However, be aware that the second option represents an extra cost .
How to define a collection rule?
Educational institutions provide social services, but they are still businesses . Like any other business, they need a collection rule to reduce default and maintain financial health .
The collection rule is a sequence of actions that aims to recover lost credit – in this case, the unpaid monthly fee.
This series may consist of notifications via SMS, emails, Registration Letters and NEJ Letters. In more extreme cases, it may involve legal action.
The main advantage of the collection rule is that it strengthens ties with the consumer. Instead of going directly to court (which causes a series of problems), the institution resolves the problem amicably.
It all starts with a simple reminder, after all, we all forget to pay a bill from time to time. This message can be sent by SMS or email right after the bill is due.
If the student has not paid the monthly fee, his/her name may be registered with the SCPC.
Once this is done, the customer will receive a Notice Letter by mail, at the address provided in the contract. At this point, an attempt to negotiate begins.
If this measure is ineffective, then the institution can resort to NEJ Letters (extrajudicial collection notices). Here, the approach is a little more incisive.
Despite this characteristic, private schools, colleges and universities continue to be businesses. This means that, in order to remain financially stable and healthy, they need to generate profit and control defaults.
Without financial resources, the institution cannot fulfill its main mission – which is to offer quality education.
When it comes to school default, there are many preconceptions. One of them is that the institution, due to its social role, cannot register defaulting students or their guardians with the SCPC.
This is a myth. PROCON-PR understands that including the cash app database is not considered illegal. Delayed payment of monthly fees is considered a breach of the educational services contract. This is governed by the Consumer Protection Code (CDC) Law 8,078/90. Therefore, it is up to the institution to choose the most efficient means of collection.
If you don't know where to start, keep an eye on the following lines. I will explain what negative listing is, how to blacklist a delinquent student and other preventive measures.
What is negativity?
Let's start with the basics and understand what a negative credit rating is . When we blacklist a defaulter, we inform the credit bureaus that they have not complied with a financial agreement. In the case of educational institutions, the commitment would be to pay the monthly installments on time.
The negative rating is reflected in the score , which is a consumer's credit rating in the market. The fewer points a consumer has, the greater the risk of becoming delinquent in the next 12 months.
The bureaus, in turn, are a type of financial database , in which we make the records. The best known are: Boa Vista / SCPC , Serasa and SPC.
The registry works like this:
You inform the defaulter's CPF to the bureau;
He will receive, by mail, a document informing him of the amount of the debt and what to do to pay it off. We call this document a “Notice Letter”;
After receiving it, the debtor will have a period of time to contact the institution and negotiate the debt.
This charge can be made by the institution's own finance department or by a specialized company. However, be aware that the second option represents an extra cost .
How to define a collection rule?
Educational institutions provide social services, but they are still businesses . Like any other business, they need a collection rule to reduce default and maintain financial health .
The collection rule is a sequence of actions that aims to recover lost credit – in this case, the unpaid monthly fee.
This series may consist of notifications via SMS, emails, Registration Letters and NEJ Letters. In more extreme cases, it may involve legal action.
The main advantage of the collection rule is that it strengthens ties with the consumer. Instead of going directly to court (which causes a series of problems), the institution resolves the problem amicably.
It all starts with a simple reminder, after all, we all forget to pay a bill from time to time. This message can be sent by SMS or email right after the bill is due.
If the student has not paid the monthly fee, his/her name may be registered with the SCPC.
Once this is done, the customer will receive a Notice Letter by mail, at the address provided in the contract. At this point, an attempt to negotiate begins.
If this measure is ineffective, then the institution can resort to NEJ Letters (extrajudicial collection notices). Here, the approach is a little more incisive.