LAFAYETTE – Ivy Tech Community College is joining a program that docks the income tax refunds of students who owe money on their tuition bills or haven’t repaid financial aid after withdrawing from classes.
Ivy Tech will start using the state’s tax intercept program in 2013 in an attempt to collect nearly $9 million in past due bills, the Journal & Courier reported Monday.
In the past few years, the community college system with more than 100,000 students has written off at least 3 percent – or more than $8 million – in uncollected student fees.
Chris Ruhl, Ivy Tech’s senior vice president and chief financial officer, said while the school expects 1 percent to 1.5 percent of its entire general fund will be lost to uncollected bills, it’s making changes to limit those losses.
Obviously every dollar is precious to us, he said. Every organization, especially ours, wishes to collect every dollar we bill.
The tax intercept program will apply to students who owe money for the 2011-12 academic year and thereafter, with Ivy Tech asking the state Department of Revenue to divert part or all of tax refunds for those people to cover the debts.
A similar system is used by the state to collect back child support.
Ruhl said Ivy Tech students will be notified if their accounts are forwarded to the state and they can appeal the intercept.
Ivy Tech also uses collection agencies to collect on outstanding debts. They recover about $1 million a year.
To limit write-offs, Ivy Tech has decreased the money it advances students on federal loans to buy books and supplies and locked the accounts of some students who hadn’t paid to prevent them from enrolling in future classes, Ruhl said.