Plastic Plans and Schar    7008-01        ZZar

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                       TO: Interested Christian School                                                                       FROM: Jim Bramer, Retired Auditor-CPA
                                                                                                                                                          FILE: 7008-01/schar

                       RE: Plastic Plans and Schar                                                                              Originated:  June 1998
                                                                  


Schar payment plans could be as follows:

Prepaid  - PLAN ONE

        Under this plan the Parents pay entire discounted Tuition at the time of registration. Then they pay non-tuition invoiced charges, or fees,  during the year.

Installment via Plastic - PLAN TWO

        These Parents becomes a part of the Schar Plastic Program relationship at the time of registration.  Ask us about the issue of the Parent agreeing in advance to not use Credit Cards in an abusive manner .... usually represented by the Parent NOT paying any Interest Expense on School Tuition and Fees expenses charged to their Schar  Credit Card.  Also click here  and  click here  for Debit Card and related nfo.
        Their monthly Schar balance (the monthly Tuition charge as agreed, plus any Fees charged to their account during the preceding month, etc.) is automatically charged by the School to their
Schar Plastic at the agreed time of month. Sometimes a School will participate in the annual credit card fee if the Credit Card account is used only for Schar purposes.
        Some Parents will pay via the Credit Card at the School office or via the School's Web site.
        Their
Schar balance charged to the Plastic should be totally paid off at registration time in subsequent years.

Feature possibilities of the Schar Plastic Program

        To the Parent it will appear as a single Credit Card borrowing relationship between them and Plastic. But the School could have made advance arrangements with their Credit Union.
        Each
Schar Plastic situation is a straight forward and simple agreement between the parent and the School ... it flows by their signature on certain registration paperwork. And it is crystal clear that the Parent owes the money to the Credit Union like any other Plastic borrowing arrangement. Each individual Schar Plastic account will be mainly viewed as a relationship between the Parent and the Credit Union, but it is actually a part of a whole.
        The SCHOOL might want to judiciously guarantee payment to the Credit Union of all of these
Schar Plastic accounts. The School will receive monthly status reports covering all of these Schar  Plastic accounts. This could help in possible Schar EMERGENCY during the year.

It is a WinWin situation for all parties ---

---- Parents will pay the same amount of Tuition and fees. They have some additional payment flexibility. but they pay Interest Expense to the Credit Union for it. But, of course, their Schar Plastic unpaid balance must be at zero before they register their students for subsequent years. This program could also contribute to the Parent learning to use any of their Credit cards as a tool (blessing) and not a tyrant (curse).
---- SCHOOL will always have its money at the appointed time each month via the
Schar Plastic program --- it has resources necessary to timely pay salaries and vendors. But the School has costs of annual Credit Card charges and the Credit Card processing expenses. Plus when/if a Parent is lagging re their obligations, the School is positioned to be of emergency help via its Schar EMERGENCY Fund. Money for Schar EMERGENCY can either come from the School Operating Budget or, hopefully, via a School Fund Raising endeavor.
---- The Credit Union will earn applicable Interest/processing fee income, and if the School guarantees all or a portion of amount due, the Credit Union reduces it's bad debts.

OTHER FACTORS include:

        Schar Plastic plan will always be accepted under a unified relationship with the Credit Union even if a single parent is behind in their payments. If other Credit Cards plans were used per Parent, there would not be this flexibility.
        School negotiates with the Credit Union and obtains good Annual Credit Card fees and Credit Card charge processing rates.


  Please click here for list of Schar resources on www.bcidot.org .  This was   UPTD:  June 04, 2010

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