The Critical Leadership Role of Financial Aid in Strategic Enrollment Management

1. The Critical Leadership Roleof Financial Aidin Strategic Enrollment Management

2. Presenters • Pamela Britton. Director, School Relations – College Loan Corporation pbritton@collegeloan.com • Marian Smithson Higher Education Consultant, MS Consulting msconsulting@charter.net • Brenda Thompson Assistant Vice President Enrollment Management, West Virginia University bthompso@wvu.edu

3. Introduction What will you learn from this session to take back to your institution? • New ways of thinking about the role the financial aid administrator can play in marketing, recruitment, persistence and degree completion.

4. An Enrollment Manager’s job is the easiest on campus. Everyone tells you how to do it!

5. What is Enrollment Management? • Realignment of administrative reporting lines? • Determining and achieving specific enrollment goals?

6. Realignment of Administrative Reporting Lines • Admissions and recruitment • Financial aid and scholarships • Housing and residence life • Career Planning • Retention Office • New Student Orientation

7. Determining and Achieving Specific Enrollment Goals • Freshmen • Transfer • Ethnicity • Ability level • Income level • Gender • Nationality

8. Attracting Students • For colleges and universities to be successful in attracting students, they must: • provide a quality educational experience with successful job placement upon graduation; • be distinct from their competition; • be price competitive; • be responsive to their “customers.”

9. Strategic Enrollment Management is: • establishing clear goals for the number and types of students needed to fulfill the institutional mission; • promoting academic success by improving student access, transition, persistence, and graduation; • determining, achieving, and maintaining optimum enrollment; • enabling the delivery of effective academic programs; • generating added net revenue for the institution; • enabling effective financial planning;

10. Strategic Enrollment Management is: (cont.) • increasing process and organizational efficiency; • improving service levels to all stakeholders (e.g., prospective and current students, other institutional departments, other institutions, coordinating agencies); • creating a data-rich environment to inform decisions and evaluate strategies; • creating and continuously strengthening linkages with functions and activities across the campus. Bontrager, 2005, SEM: Building Institutional Vitality in AACRAO’s newsletter

11. Projected Change in Number of High School Graduates, 2005-06 to 2015-16 Source: Chronicle of Higher Education Almanac, August 2005

12. Race / Ethnicity Distribution – US Source: Western Interstate Commission for Higher Education

13. Race / Ethnicity Distribution - US Source: Western Interstate Commission for Higher Education

14. Race / Ethnicity Distribution - Midwest Source: Western Interstate Commission for Higher Education

15. Median family income by ethnicity Source: US Census Bureau

16. College Participation Rates by Ethnicity - 2002 Source: Postsecondary Education Opportunity

17. 2005 Standardized Test Scores National averages: SAT - 1028 ACT - 20.9 SAT ACT Source: College Board and ACT

18. While financial aid already plays a critical role in the strategic enrollment management of an institution, the importance of the role will only increase as thedemographics of future college students change.

19. Financial Aid Leadership:Impacting the Family’s Perception of Affordability

20. Importance of Affordability • Enrollment essentials per Whiteside/Mentz: • The student must want to enroll. • The student must qualify for enrollment. • The student must be able to cover the cost of enrollment. • Smithson: Enrollment may not occur unless the student perceives the college or university as affordable. Whiteside/Mentz 2003, Winds of Change in SEM Monthly newsletter.

21. Importance of Affordability • 2004 Eduventure survey of 50 enrollment management professionals: • 52% indicated ensuring affordability as one of their top three current challenges and • 46% indicated ensuring affordability as one of their top two emerging challenges. Managing Collegiate Enrollments, Eduventure 2004

22. Value and Affordability • The family’s view of the institution’s affordability is driven by their perception of VALUE or net price in comparison to the QUALITY of the institution's educational offerings. • A large scholarship or aid offer alone will not change a student’s mind. Recent interviews by Stamats with 60 families indicated most would NOT encourage their child to attend a less prestigious school because of a large scholarship offer.

23. Value and Affordability • A family weighs VALUE in relation to what they perceive they will have to cover once all discounts are applied. • Perceived value will differ by family economic circumstances, as well as other factors. • Aid administrator needs to be aware of competitors’ pricing / aid strategies to help position the institution competitively.

24. Implications • Developing the family’s perception of the institution's affordability is a multi-pronged effort and is the product of – • the general image projected to the public; • the quality of its offerings and indicators thereof; • how effectively the institution maps out its discountstrategy; and • how well it sends its affordability message.

25. Implications cont’d • The financial aid administrator has a critical leadership role in – • ensuring affordability through strategic pricing, resource planning and awarding of aid as well as • effective integration of the institution’s affordability message in the institution’s communications to the student and parent. - Right message at the right time.

26. THE FUNNEL (and beyond) Intellectual / Students: Emotional Emotional Emotional Review info Apply to a few Decide on one Follow through Persist Retain ties Image Early building funnel Mid funnel period Late funnel Alumni / Retention / Entering class Donor Completion Relations Funnel Introduce Sell and persuade Keep sold Support must: transition Chart based on Scott Lomas article in NASFAA Student Aid Transcript, Vol. 15, No. 1, 2004 Funnel Stages and Affordability

27. Early: Introduce Affordability • Straightforward statement of the institution’s. affordability commitment (and whom it affects) • Early information to parents as they significantly influence the possible choices. • No hidden secrets – make affordability information easily accessible. • Make apples to apples comparison of net price to competitor’s possible.

28. Early: Introduce Affordability • Resources re four-year cost outlook: • financial guarantees, if appropriate • average % of year to year cost increases • average student loan debt • Opportunities for saving money if courses are available or guaranteed: • full-time attendance resulting in four-year completion; or • regular summer school attendance to shorten time to degree, even if part-time attendee.

29. Early: Introduce Affordability • Opportunities available for earning while learning: • student employment opportunities • co-op and paid internship opportunities • Availability of payment plan GOAL: Move your institution into consideration because it is viewed as having VALUE and is AFFORDABLE.

30. Mid: Persuade • Partnership with family as basis for financial aid customer service • Self-identification of eligibility for major awards • Renewable awards / reasonable renewal criteria • Estimator service (the closer to actual the better) • Examplesof packages by family financial strength • Examples of four-year financing • On-time aid offer (offer first, verify later) • Tools for comparing aid offer to direct costs

31. Mid (cont’d) • Follow up calls after scholarship offers or aid award letters go out, particularly for targeted populations • Outreach efforts in student’s community • e.g. Texas A & M, University of Michigan outreach financial advisers • Financial aid visits to areas where students are high need or eligible for special funds GOAL: Motivate the student to select your institution and follow up by applying for admission and aid.

32. Late: Preserve the Decision • Student is admitted, has applied and received an aid offer and sent a housing deposit. What can the aid administrator do to help preserve the student’s decision to attend? • Provide continued, positive communication. • “Your aid is in order.” • “There are ways to check that all is okay.” • “You have alternatives for paying your balance.” • “We will be available to help you.”

33. Late: Preserve the Decision • include aid information at orientation and in pre-entry communication; • make clear how and when student will receive aid in excess of bill; • describe alternatives for dealing with family portion of balance due; and • provide access to available job listings and job application process in advance of start of classes. GOAL: Reassurance of the right decision, including affordability concerns.

34. Support Enrollment Entry • Concerns in first three weeks of term – • confirmation that aid status is ok. • crediting of aid; • timing of releasing aid in excess of charges; • amount of excess aid; • locating a job and getting on payroll; and • time pressures due to class assignments so resistance to spending time on $$ issues.

35. Support Enrollment Entry GOAL: Student can head to the classroom. No financial worries for the academic year unless significant change in financial situation.

36. Persisting to Completion • As the student moves forward in his/her degree program: • Guidelines for retention of aid clear and accessible via the web or other (also – reasonableness of renewal policies); • Information re tuition increases targeted to aid population that describes alternatives; • At minimum, annual statement of cumulative debt and projected post-graduation repayment; • Resolution of student accounts with large unpaid balances before end of each term;

37. Persisting to Completion • Distribute e-newsletter information updating student on financial aid changes and smart consumer behavior; • Development of better than minimum wage jobs; • Training of all appropriate campus staff re financial aid basics on an annual basis; • Work with departing students as to what needs to be done re their finances so they can return. GOAL: Continued perception the institution will remain affordable as student re-evaluates this annually.

38. Retention Puzzle Student Assessments Institutional Assessment Student Interventions Institutional Interventions

39. Who Are You? • First-year retention rates • Graduation rates • Student achievement • Performance gaps • Financial aid impact • Indebtedness • (loans and credit cards) • Loan default rates Institutional Assessment

40. Financial Guidance Students at 2-Year Campuses Source: USA Funds Retention Project - 2002

41. Financial Guidance Students at Career and Proprietary Schools Source: USA Funds Retention Project – 2002

42. Financial Guidance Students at 4-Year Campuses Source: USA Funds Retention Project – 2002

43. Financial Guidance Faculty, Staff and Administrators at 4-Year Campuses Source: USA Funds Retention Project - 2002

44. Financial Guidance Faculty, Staff and Administrators at 2-Year Campuses Source: USA Funds Retention Project - 2002

45. Financial Aid and Retention Academic Preparation Source: Noel-Levitz, 2002

46. Who Are Your Students? • Entering risk factors • Motivation risk factors • Integration risk factors Student Assessments

47. Conceptual Model of Retention Entering Student Variables +Student Motivation Variables + Student Integration Variables =Student’s Likelihood to Persist

48. Entering Student Variables • Academic history • Geo-demographic variables • Test scores • Initial impressions of institution • Enrollment factors • Financial aid information • Financial history • Financial literacy scores

49. Student Motivation Variables • Freshman survey data • Academic and social motivation data • Placement tests • Academic plans/goals • Family support system • Sense of financial security • Receptivity to financial guidance

50. Student Motivation Variables • Residence status • Predicted GPA • End-of-term grades • Affiliations • Credit hours attempted/completed • Academic status • Major • Residence hall assignment • Credit card debt • Student loan debt • Work hours