Issues related to last year’s FAFSA have significantly affected private colleges and universities’ incoming class enrollment, revenue and relationship with the Department of Education, according to a fall survey from the National Association of Independent Colleges and Universities.
Of the 251 member institutions surveyed, 82% said FAFSA’s turbulent rollout affected other institutional processes, such as housing, registration, billing and more. Nearly nine out of ten (87%) continue to grapple with unresolved problems.
A different incoming class
About half of all surveyed private colleges and universities said their incoming class was “more difficult” to fill, and 44% reported lower enrollment. More than a fifth (22%) accepted fewer financial aid recipients and 11% noticed a decline in their students’ racial diversity. All in all, 74% said that last year’s FAFSA “changed the composition” of their incoming class.
Private nonprofit institutions usually market their net price to prospective students early into the admissions cycle, the report explained. However, the glitch-ridden FAFSA website stunted students’ ability to file on time, thus delaying institutions from sharing estimated aid packages. Private institutions boast some of the highest (though mostly misleading) sticker prices in the nation.
Declining tuition revenue
Schools that reported declines in students needing financial assistance also reported decreased fall enrollment. But that’s not the only reason one-third of institutions reported a decrease in net tuition revenue.
With financial aid offices in the dark regarding students’ federal aid, several institutions began issuing grants and other forms of aid from their own resources; 37% increased the amount of institutional aid distributed; and 48% reported an increase in their discount rate.
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However, institutions often overestimated the amount of aid they needed to grant, the report asserts. Leaders from Assumption University and Western New England University offered their own financial aid forms to attract and retain their student bodies.
“It was a calculated risk on our part,” said Greg Matthews, vice president for enrollment management at Western New England University. “We really had to accept the closest account.”
Despite the declines for some schools, 45% reported an increase in their net tuition revenue. The report suggests that this may be due to the 64% increase in Pell Grant recipients and the FAFSA-induced reduction of high-need students, which helped balance costs or increase revenue.
Loss of trust in the Department
Nearly all respondents (98%) reported increased stress on staff and resources. Aside from the compressed time frame private colleges had to process and reward financial aid packages, assistance from the Department of Education didn’t help.
- 84% of institutions felt information received from the department did not allow them to successfully plan for the fall term.
- 90% felt that the department did not provide timely information
- 75% said the department was not timely in responding to requests for assistance.
“Responses intimated a loss of trust between financial aid administrators and ED,” the report reads. “Although there have been some improvements, distrust remains, with schools worried about ongoing challenges and the misconception that the issues were their fault.”
