University Business - May 2011 - (Page 21)

MONEY M AT T E R S The Role of Financial Aid and Retention What the realities are and smart retention strategies By Jim Scannell YPICALLY, WHEN INSTI tutions conduct exit surveys for students who withdraw prior to completing a degree program, featured prominently are ﬁnancial aid, cost, or affordability. ey usually garner one of the top slots for reasons listed for withdrawal prior to graduation. But research shows there are a number of other drivers that inﬂuence re-enrollment trends. First and foremost is level of academic success (e.g., term 1 GPA) followed by variables such as entry qualiﬁcations (GPA in high school, standardized test scores, etc.); residential versus commuter status; attempted hours; participation in intercollegiate athletics or other extracurricular activities; gender; and race. Variables such as amount of borrowing, unmet need, and level of grant do sometimes emerge as statistically signiﬁcant variables in predictive retention models, but their inﬂuence on behavior is often minor. Consequently, it’s likely that ﬁnancial aid, costs, or aﬀordability are listed on withdrawal surveys with such great frequency because they’re a proxy for more personal and diﬃcult reasons for withdrawing, such as loss of conﬁdence, loss of focus, and loss of purpose. Michael Collette, vice president for marketing and strategic planning at Anderson University (Ind.), believes that ﬁnancial aid or costs are much more important for “ﬁrst purchase” than “repurchase” decisions. Collette notes that “degrees of dissatisfaction and satisfaction (the latter involving esteem, relationships, etc.) are the real drivers to re-enrollment behavior. External variables such as cost typically do not drive the majority of students away from campus. Rather, it’s internal variables such as relationships, connections, and involveuniversitybusiness.com T Costs and affordability are likely a proxy for more personal reasons for withdrawing. ment that are the real inﬂuencers.” While there is evidence in this economy that more and more students are leaving four-year institutions (public and private) and enrolling at two-year institutions near home to save money, Anderson’s experience over the last few years is worth noting. In 2009, Anderson lost a substantial number of students from fall to spring semester who ultimately enrolled in Ivy Tech, Indiana’s community college system. So it would seem logical to conclude that money was the factor in this case. Anderson oﬃcials took note of this and introduced a number of strategic interventions in the fall of 2010, including a freshman year experience and graduate assistants who build relationships with student athletes around their academic success. Retention from fall 2010 to spring 2011 is the highest it has ever been, and it is not because the economy rebounded in the midwest. A lesson to be learned in this instance is that when students are satisﬁed and connected to the campus, concerns about money can be overcome. LEVELS OF INDEBTEDNESS Make no mistake, given the ﬁnancial rollercoaster currently impacting students and families, aﬀording higher education for four years is a major commitment. Many families are experiencing catastrophic ﬁnancial reversals. And some families are planning for the ﬁrst year but not for years two, three, and four. Still others are looking at levels of indebtedness and questioning whether the investment will pay oﬀ. William N. Black, senior vice provost for enrollment management at Temple University (Pa.), worries a lot about levels of indebtedness combined with hours worked per week. When Temple conducted price sensitivity analysis of its new and continuing students and adjusted its ﬁnancial aid strategies accordingly, the study revealed that money was not the primary driver for retention. In many cases, credit hours attempted was a major player. Students attempting less than 12 credit hours at Temple re-enroll at a much lower rate. As a result, Temple now focuses its counseling and advising sessions in part on the number of hours students worked per week and scheduling to maximize attempted hours. Like most institutions, Temple doesn’t alter ﬁnancial aid packages once a student enrolls. Students receive their same merit and need-based awards, assuming they meet academic requirements necessary for retaining their merit and ﬁnancial need doesn’t change substantially. Temple is looking to create a database of its endowed awards for continuing students so Jim Scannell is a partner in the enrollment management consulting ﬁrm Scannell & Kurz. He can be reached via the ﬁrm’s website, www .scannellkurz.com. May 2010 | 21 http://www.scannellkurz.com http://www.scannellkurz.com http://www.universitybusiness.com

Table of Contents for the Digital Edition of University Business - May 2011

University Business - May 2011
Contents
Editor's Note
College Index
Ad Index
Behind the News
Viewpoint
Money Matters
Human Resources
Community Colleges
Networks Freshen Up
Collaboration Station
Someone to Watch Over You
What's New
End Note

University Business - May 2011