University Business - January 2010 - (Page 42)

money m at t e r s financial aid and student accounts has never been more pressing. While providing seamless service to students has always been important, many families are now facing new challenges in obtaining private loans and meeting their share of charges. Working together, financial aid and student accounts staffs can identify students who might be at most risk financially and help them find a way to continue. 5. Keep admissions and financial aid staffs on the same page by using net tuition revenue goals as the common denominator. The admissions office is often held accountable for meeting targets for class size and composition, while the financial aid office is judged on whether or not they stay within budget limitations. These different goals can create tension and, in many cases, lead to suboptimal outcomes. Holding both offices accountable for meeting net tuition revenue targets can ensure the two teams aren’t working toward separate goals. Without this common denominator, an institution runs the risk of reducing net revenues by either spending too much to meet enrollment targets or missing the opportunity to increase enrollments to stay within an unrealistic financial aid budget target. 6. Use an analytical, not anecdotal, approach to adjusting aid policies. Some institutions decide to change merit programs or other aid policies based on what they know about a competitor’s policies, or based on stories about how individual students responded to aid offers. Keeping an “ear to the ground” is important, but it’s critical to balance these stories with an analytical examination of admit pool behavior. Examining yield rates by need and grant for different subpopulations and (ideally) using predictive modeling to understand the influence of grant on enrollment, holding all other factors constant, will help in assessing if a policy change is needed—and, if so, how much of an adjustment would be ideal. 42 | January 2010 7. Be as transparent as possible about awarding policies. New federal requirements for net price calculators on institutional websites will soon make some level of transparency universal. But in many cases these calculators will be driven by average awards and fail to highlight how packages may differ based on the quality of the student, family need, or other critical attributes. Posting clear criteria and award levels for merit scholarships and eligibility criteria for any “entitlements” (e.g., grants based on geography or religious affiliation) on the admissions website can help students know of at least some aid for which they would be eligible before even applying. 8. Watch out for policies that stack merit awards on entitlements, needbased aid, talent-based aid, etc. The downside of being transparent: Offering awards based on a variety of criteria can result in overfunding students who meet all criteria, while underfunding students who don’t meet any. Also, because awards of circumstance often are targeted to students with a natural connection to the institution (e.g., discounts for alumni children, siblings, students from the institution’s religious denomination, etc.), the highest awards can end up going to students who already have a high propensity to enroll, regardless of the aid offered, rather than targeting aid to populations who would not enroll without the additional financial incentive. 9. Make sure renewal policies are not negatively impacting retention. Setting high GPA requirements for renewing merit awards is the most common aid policy that can negatively impact retention. Examine retention rates for merit recipients and nonmerit recipients with similar GPAs to help determine if merit renewal criteria are too stringent. Also monitor retention rates by levels of need and unmet need (defined as need minus grants from all sources) to learn if retention rates are being impacted by need-based aid policies. In the current economic environment, it’s important to be open to appeals based on changes in family circumstances. Policies that hold grants constant for returning students, expecting families to absorb tuition increases, may have worked well in the past, but may need to be more flexible. 10. Be transfer friendly. An increasing number of students who ultimately intend to achieve a four-year degree are starting at a low-cost community college. So colleges that are not transfer friendly may lose students twice—in freshman year to community colleges and in junior year to another institution with clearer credit articulation agreements, more generous credit acceptance policies, better housing opportunities, and special financial aid policies for transfers. Since transfers are usually considering fewer alternative institutions than freshmen, they don’t typically need to be discounted as heavily. But it’s still important to make your education affordable to them and to offer aid programs specifically targeted to this population. Keys to Future success Concerns about affordability aren’t new, but institutions haven’t yet addressed rising costs in any substantive way. So students and families are increasingly coming up with their own solutions. They’re loading up on AP credits in high school to complete college requirements more quickly, starting four-year degrees at twoyear schools, and negotiating aid offers. The most successful institutions in the future will likely be those that have found ways to truly reduce costs for students without sacrificing quality. Industry partnerships, more efficient delivery systems, focused curricular offerings, and stronger consortial relationships with other colleges are just a few options already being explored. Having these conversations on your campus is probably the most important action item to take away from the fall 2009 experience. universitybusiness.com http://www.universitybusiness.com

Table of Contents for the Digital Edition of University Business - January 2010

University Business - January 2010
Contents
Editor's Note
Company Index
College Index
Advisory Board
Behind the News
Community Colleges
Sense of Place
Viewpoint
Human Resources
Money Matters
Endowments 2010: Risk Management, Liquidity, Stewardship
Donor 3.0
Reporting for Duty
End Note

University Business - January 2010