Third-Party Billing

What is Third-Party Billing?

The University of Alabama in Huntsville (UAH) defines third-party billing as an arrangement in which an external organization agrees to pay all or a portion of a student's eligible university charges and requires UAH to invoice the organization for payment.

Examples of third-party sponsors may include:

• Employers
• Government agencies
• Military or veterans' organizations
• Workforce development agencies
• Other organizations that provide educational benefits or sponsorships on behalf of a student

Student and Sponsor Responsibilities

Student Responsibilities

Students participating in a third-party billing arrangement are responsible for:

• Providing UAH with all required third-party sponsorship documentation in a timely manner.
• Ensuring that the documentation accurately identifies the student, sponsoring organization, sponsorship period, and eligible charges.
• Reviewing the terms and conditions of their sponsorship and understanding which charges the sponsor has agreed to pay.
• Ensuring that required authorization or eligibility documentation is renewed each term or as required by the sponsoring organization.
• Monitoring their UAH student account to ensure that third-party funding has been properly applied.
• Paying all charges that are not covered by the third-party sponsor.
• Providing updated information to UAH if the sponsorship is changed, reduced, cancelled, or otherwise modified.
• Communicating with the sponsoring organization regarding any requirements necessary for the sponsor to process payment.
• Resolving any outstanding balance resulting from a sponsor's failure to pay, unless otherwise specified by the terms of the sponsorship agreement.

Students should not assume that submission of third-party sponsorship documentation eliminates their financial responsibility for charges that are not covered by the sponsor.

Sponsor Responsibilities

Third-party sponsors are responsible for:

• Providing UAH with complete and accurate sponsorship or authorization documentation.
• Clearly identifying the student(s) covered by the sponsorship.
• Identifying the period of sponsorship and the specific educational expenses or charges the sponsor has agreed to pay.
• Notifying UAH promptly of any changes to or cancellation of a student's sponsorship.
• Paying invoices submitted by UAH in accordance with the sponsor's established payment terms.
• Providing any additional documentation or information reasonably required by UAH to process the sponsorship and payment.
• Directing questions regarding the sponsor's authorization, eligibility requirements, or payment to the appropriate UAH office or designated third-party billing contact.
• Resolving any discrepancies between the sponsor's authorization and UAH's invoice in a timely manner.

A third-party sponsor's authorization to pay a student's charges does not constitute payment until UAH receives and posts the sponsor's payment to the student's account.

Shared Responsibility

UAH, the student, and the third-party sponsor share responsibility for ensuring that third-party billing transactions are accurate and processed timely. The student remains responsible for monitoring their account and communicating with both UAH and the sponsor when issues arise that may delay or prevent payment.

Third-Party Billing Process

The third-party billing process begins when a student provides UAH with documentation from an approved third-party sponsor confirming the sponsor’s commitment to pay eligible educational expenses on the student’s behalf.

1. Submission of Sponsorship Documentation

The student is responsible for providing UAH with appropriate documentation from the third-party sponsor. The documentation must identify the student, the sponsoring organization, the period of sponsorship, and the specific charges or expenses the sponsor has agreed to pay.

UAH will review the documentation to determine whether the sponsorship is valid and what charges are eligible for third-party billing.

2. Application of Third-Party Funding

Once the sponsorship has been approved, UAH will apply the anticipated third-party funding to the student's account as a memo or anticipated payment. The memoed amount represents the sponsor's commitment to pay and is not considered a payment received by UAH.

The third-party funding will be applied only to eligible charges covered by the sponsor's authorization. Any charges not covered by the sponsorship remain the responsibility of the student.

3. Student Account and Financial Aid

Third-party sponsorships may affect a student's financial aid eligibility and overall financial aid package. UAH will evaluate third-party funding in accordance with applicable federal, state, and institutional financial aid regulations and policies.

When appropriate, the Office of Financial Aid will coordinate with the appropriate university offices to ensure that third-party funding is properly considered when determining a student's eligibility for financial aid.

4. Billing the Third-Party Sponsor

After the appropriate charges have been identified and the sponsorship has been verified, UAH will invoice the third-party sponsor for the amount authorized under the sponsorship agreement.

UAH will not invoice a third-party sponsor for charges that are not covered by the sponsor's authorization.

5. Receipt and Application of Payment

Payments received from third-party sponsors will be applied to the student's account and will replace the corresponding anticipated third-party funding previously memoed to the account.

UAH will maintain appropriate documentation supporting the sponsorship, the amount billed, and the payment received to ensure that third-party transactions can be properly reconciled.

6. Unpaid or Delinquent Third-Party Accounts

If a third-party sponsor does not pay an invoice within the applicable payment period, UAH may remove the anticipated third-party funding from the student's account. Any resulting balance will become the responsibility of the student unless otherwise determined by UAH based on the terms of the sponsorship agreement.

Students are responsible for ensuring that required sponsorship documentation is submitted timely and that their sponsor fulfills its payment obligation.

7. Internal Controls

UAH will maintain appropriate internal controls over third-party billing to ensure that:

• Third-party sponsorships are properly documented and authorized.
• Anticipated funding is applied only to eligible student charges.
• Invoices are issued to the appropriate sponsoring organization.
• Payments are properly received, posted, and reconciled.
• Student account balances accurately reflect third-party payments.