It has been demonstrated amply that financial aid leveraging can, under the right circumstances, increase enrollment and net tuition revenue. For some, however, that isn’t the case.
Enrollment leaders must therefore assess other aspects of recruitment to determine how effectively they are working to build larger, more committed applicant and admit pools, especially when increases in aid are not conducive or possible.
Institutions need to use all the tools at their disposal to compete in the crowded higher education landscape: Is the institution making a strong enough case for affordability? Are there strategies in place to enhance the value proposition by making a convincing case for return on investment? Is the institution using a system to qualify the inquiry, applicant and admit pools? Are web strategies optimized?
These key issues are explored in more detail below. In addition, this year, the advent of Prior Prior Year (PPY) FAFSA filing will call for major communication and calendar adjustments for all institutions. Those changes will be discussed later in this article.
Tell them they can afford it
Families are increasingly price sensitive. Average middle income families spent less on college in 2013-14 than in 2009-10 (a trend that began to reverse in 2015). Furthermore, although 75 percent of incoming students were accepted to their first-choice schools, only 57 percent enrolled in those schools, citing cost and aid as influencing that decision.
Also, the results of a 2015 Ruffalo Noel Levitz survey (http://ubmag.me/rcstudy) on the expectations of rising seniors showed that sticker price and a family’s perception that attending a particular school would cause them financial difficulty were among the top reasons for students to eliminate a school from consideration.
It is therefore important that affordability messages are communicated early and often by using, among other tools, income profiles and case studies that can help families see that others like them have been able to afford the school.
The Net Price Calculator (NPC) is one tool that, when regularly updated, allows families to look at an institution from a perspective that emphasizes net price, rather than “sticker” price, which is essential to communicate as families consider a given institution’s affordability.
A good NPC will balance simplicity and accuracy, so that families complete the calculator and receive a reasonable result. In addition, many institutions have merit scholarship programs, and if the NPC does not collect academic information, it will be inaccurate for most students.
Some might argue that NPCs will be less relevant because of PPY, but this is not the case. Colleges will still need to help high school freshmen and sophomores understand their usefulness.
Market your million-dollar investment
There has been data available for many decades showing that the financial benefits of a college education far outweigh the costs. This information, however, is not always “top of mind” with prospective students and their families, and seems to have taken a back seat in recent years.
The Federal Reserve Bank of New York published a study in 2014 addressing concerns about the value of a college education in the face of increasing tuition charges. In addition, student loan debt reached an all-time high during this time while the labor market for college graduates has been slow to recover.
Nonetheless, the findings showed that unemployment rates for college graduates has remained below average and individuals with bachelor’s degrees have, over the last decade, earned a 15 percent return on investment—a higher return than most other successful investment options.
To put that in terms of earning potential, over the last four decades those with a bachelor’s degree have earned, during their working years, over a million dollars more than high school graduates during the same time period. In other words, workers with less education have struggled financially even more than college graduates.
Based on that data, institutions with lower than average loan default rates should make that information available in order to allow students and their families to make the connection between obtaining a degree at their institution and the ability to pay their loans back on time.
Student decisions on where to enroll essentially come down to the value proposition a school has created in the marketplace and the student’s willingness to pay for that educational experience.
Components of the value proposition comprise information on: students’ access to faculty; opportunities for experiential learning; retention and graduation rates; and graduate outcomes based on majors and where recent alumni are employed, their job titles, salaries and advanced degrees earned.
This information must be available and regularly updated in all marketing materials and, more importantly, on each academic department’s webpage and in the office of career development. Support for these strategies is found in data from the National Norms Fall 2015 survey (http://UBmag.me/taf) where it was reported that good jobs and admissions to graduate or professional schools have gained favor in the college choice process. Proof of this is found in the increased percentage of students who, compared to previous years, consider these factors “very important” in 2015.
Fill the pool with strong prospects
For enrollment leadership to assign resources more effectively and efficiently, a system must be put in place that accurately projects the behavior of prospective students as they move through the early stages of the admissions funnel—from inquiry to applicant to admit.
Predictive modeling and qualification of students before they apply will assist in building admit pools with higher yield and retention rates. Effective strategies include the use of customer relationship management software for managing and tracking recruitment communications.
In addition, reaching students by telephone to rate their level of interest as well as creating targeted print and electronic “micro-campaigns” to generate applications can focus recruitment on students most likely to apply and enroll. This can also save money by targeting publication and marketing dollars more effectively.
Recent surveys of recruitment strategies, however, revealed that less than 25 percent of institutions surveyed were consistently using these tools.
Also important in building an interested, engaged pool is attention to other uses of technology, such as: optimizing the website for mobile browsers; text messaging or social media strategies; email communications; and the recruitment and academic departments’ web pages.
The timing and implementation of these functions are likely to change in the near future as Prior Prior Year FAFSA filing gets under way in October 2016. To that end, enrollment and financial aid leadership should direct efforts to update their systems in a timely manner to accommodate this change.
It will also be important to: notify prospective students of the earlier deadline for filing the FAFSA; encourage leadership to set tuition earlier; and provide financial aid estimates earlier than ever.
Without increasing institutional aid expenditures, taking full advantage of the changes required by PPY could be the most significant, impactful adjustment an enrollment office could make in 2016.
Realistic expectations
Finally, given the future demographic outlook on the available pool of traditional students, it is not realistic to expect that all institutions can grow. Therefore, it is important for institutions to assess if adoption of a growth strategy is the most financially advantageous path.
If it’s determined that growing enrollments is viable, and financial aid is already being distributed strategically, then careful execution of these enrollment strategies will help institutions build application and admit pools to meet enrollment goals—rather than using increased financial aid awards.
Roberto Santizo is an enrollment management consultant at Scannell & Kurz higher education enrollment consultants, a Ruffalo Cody company.
