Packaging Theory: The How, When and To Whom Behind Creating a Packaging Procedure

1. Packaging Theory: The How, When and To Whom Behind Creating a Packaging Procedure Michele Kosboth – Director of Student Financial Planning, Lasell College Daniel T. Barkowitz, Director of Student Financial Aid, MIT

2. Encouraging access and choice for qualified needy students. Furthering persistence toward a degree. Promoting affordability for lower-income students. Promoting affordability for middle-income students. Rewarding student scholarship/merit. Targeting specific groups and priorities. Improving institutional financial aid administrative accountability. Managing institutional enrollment. Redistributing state taxpayer revenue. State of Diffusion:Defining Student Aid in an Era of Multiple Purposes(available at www.ihep.com)

3. In an era of increasing demand… • How do you distribute the supply? • Today’s Agenda • Types of Aid Packaging • Understanding Preferencing • The % Method • Where do we go from Here?

4. Purpose of financial aid • Vision • Does the college have a vision? • Is Aid as a part of it? • Do you have a personal bias?

5. Need vs. Merit Aid: • Need-Based • Pros and Cons • Merit-Based • Pros and Cons

6. Merit within Need • AKA Preferencing • Using some other measure to rank students and then prioritizing package based on that measure. • Examples: • Admissions rank • Major • Likelihood of enrolling

7. Preferencing – Your Goals • Equity and Access • Recruitment driven • Just make the class? • Improve the academic profile? • Improve enrollment in a program or major? • Improve enrollment among a cohort group? • Reward driven • Honors • Community Service • Leadership • Athletics (NCAA allowed?)

8. What do You Have to Work With? • What is your discount rate? • Definition (institutional grant aid / total tuition [+ room and board?] revenue). • Do you know this number? • What has it been historically? • Where is your competition? • What can you afford? • Enrollment. • What size is optimum? Where are you now? • Resident vs. Commuter blend.

9. How will you operate? • Full need? • Private schools only? • Which need? • Solving the IM/FM issue. • For all populations? • Gap? • Maximum Eligibility? • Public or low grant schools only? • Package by date? • Limited funds – give what you can? • Limit on grant? • Gap? • Rationing of funds?

10. Another strategy • Percent of need met by (institutional) grant. • Studies indicate that when comparing packages parents focus on the grant amount. • Can you predict enrollment based on %age of need met by grant • Case example: Lasell College • Add bonus for desirable traits.

11. Example of how this works

12. What will you do in future years? • “Grandparent” to first year amount (dollars)? • Use the same % of new need? • A whole new calculation? • Consider academic performance of 1st year(s)?

13. What other strategies? • % of remaining need (after self-help and gap) with grant. • Pros / cons. • Fixed gap (based on populations?). • Other models?

14. Test, try, and improve • Write out the logic. • Try modeling any changes on this year’s population to measure impact. • Keep in mind your goals. • Simulate packaging before you deploy!

15. Wrap Up. • Thanks! • Evaluation. • Any last questions or comments? • Contact us: Daniel Barkowitz Michele Kosboth barkowit@mit.edu mkosboth@lasell.edu (617) 258-5612 (617) 243-2378