THE CALIFORNIA STATE UNIVERSITY
OFFICE OF THE CHANCELLOR
400 Golden Shore Drive
Long Beach, California 90802-4275
Code: AD NOAT 95-03
Date: January 25, 1995
To: Financial Managers
From: George A. Pardon
Business and Finance
Subject: Installment Payment Plan Program
The Installment Payment Plan Program must reimburse the State of California
for the interest income lost to the State as a result of participants
deferring payment for part of their registration fees. This lost interest
is paid out of the Installment Payment Plan revenues generated by the
processing fees. Section 89700.1(c) states that "the portion of the administrative
fee attributable to the reimbursement for loss of interest earnings shall be
deposited in the General Fund." The State Controller's Office has requested
the interest be remitted to the State by remittance advice to account 161400,
Miscellaneous Revenue. Interest due the State must be remitted 45 days after
the end of each semester or quarter.
At the end of the payment period for each semester or quarter, each campus
must calculate the amount of lost interest for that semester. The lost interest
must be calculated by multiplying the total amount of the payment due (for
only State University Fees or Non-resident Tuition) times the number of days
for which that payment was deferred; i.e., from the first day of classes to the
payment date. The same is done for any payments thereafter. The number of
days deferred always includes the first day of classes but does not include the
day of the payment. The totals are then multiplied by the current Pooled
Money Investment rate divided by 100, multiplied by the number of days
deferred for each payment, and then divided by 360 (the standard year for the
calculation of interest).
Interest will continue to be due until the deferment has been settled.
Deferments can only be settled by payment of the deferment in full,
disenrollment of the student before the end of semester, or payment of the
deferment by the campus. BA 93-13 states "interest will accumulate on the
unpaid balance and is owed to the State. There was a commitment by the
CSU not to penalize the State by collecting fees in installments. Therefore,
the campus must reimburse the State at some point for the fees not collected."
If you have any questions, please contact Ron Ashcroft at (310) 951-4610.