University Business - July 2008 - (Page 28)

MONEY M AT T E R S SAMPLE DATA: HOW GPA AFFECTS YIELD RATES Fall 2007 Transfer College GPA (Most Recent Institution) T no GPA 3.5+ 3.25-3.49 3.00-3.24 2.50-2.99 2.00-2.49 < 2.00 529 318 235 329 562 205 73 473 311 235 325 550 199 70 385 310 235 325 549 61 13 234 175 133 212 365 50 10 60.8% 56.5% 56.6% 65.2% 66.5% 82.0% 76.9% App Comp App Admit Matric Yield Less cumulative debt. Students who have chosen to attend a community college for their ﬁrst two years of a four-year degree typically will have accumulated less debt by the end of their sophomore year than those who started their education at a four-year institution. Consequently, their willingness and ability to borrow for their last two years will be greater than for students starting as freshmen. Joe Bailey, director of Financial Aid at Genesee Community College (N.Y.), is an advocate of the 2+2 option for earning a bachelor’s degree. “We’ve had many students choose GCC because of its value for the price. Most students have a plan: two years with us and two at a four-year institution.” One of Bailey’s former work-study students, for example, knew she was going to be an engineer but didn’t want the debt burden that attending a four-year institution provided. She lived at home while earning her associate degree at GCC and then went on to Clarkson University (N.Y.) for an engineering degree and ﬁnally Simon School of Business at the University of Rochester (N.Y.) for her MBA. Bailey adds that many students choose to begin at GCC and transfer to SUNY Geneseo for their teaching degree. “This is done in part because of the low cost of education at GCC.” DATADRIVEN STRATEGIES Although the factors discussed above typically result in transfers being less price-sensitive than freshmen, it is still important for institutions to use historical data eﬀectively to understand what aid strategies for transfers will produce the best results (maximize enrollments, increase net tuition revenue, meet diversity goals, etc.). Some institutions are using sophisticated econometric techniques to shed light on the signiﬁcance of an applicant’s total grant in predicting enrollment. Less sophisticated tools, like table analysis, can also be used to estimate the likely impact that changes in awarding strategy have on targeted enrollment goals. The following steps describe the process for developing meaningful yield tables in order to explore the impact of total grant assistance (merit and need-based, institutional and external) on enrollment behavior. First, segment the data on two or three years of transfer admits into categories of transfer college GPA in order to look for breakpoints in yield at diﬀerent GPA levels. Sample data (see chart) shows that yields increase for admitted transfers with a prior college GPA below 3.25, and increase again when the GPA is below 2.50. A logical approach, therefore, would be to segment admitted transfers into three quality groups. Analyzing the yield patterns for each quality group comes next. This can be done by examining ﬁnancial need and total grant levels and determining the appropriate amount of grant assistance to oﬀer. The point at which additional grant funds to students with similar need levels does not substantially increase yield rates provides the line where the total grant is overly generous. On the other hand, there may be examples where additional grant funding does improve yields, indicating that in order to increase enrollment and net tuition revenue, ﬁnancial aid awards should be increased. For example, at a higher cost, private institution, if yield increases from 45 percent when no grant is oﬀered to 61 percent when $1,500 is awarded, a simple cost-beneﬁt analysis will show that oﬀering at least $1,500 to all admits in that quality group will improve both yield and net tuition revenue. If then the yield only improves to 64 percent when $2,500 in grant money is awarded, the additional enrolled students may actually lower the total net tuition revenue. OTHER CONSIDERATIONS When ﬁnancial aid strategies for transfers diﬀer from those for freshmen, it is possible that some transfer students may have originally applied as freshmen and been oﬀered a more generous ﬁnancial aid award (especially merit awards) than they are now receiving as transfers. This will likely generate questions and in all likelihood disappointment. It is critical, then, that verbal and written communication—including that provided on the institution’s website—clearly state the criteria and amounts of all available awards. While it is not uncommon for merit-based aid to be either lower or not oﬀered at all to transfer students, it is important that students understand what is available prior to making their enrollment decision. Paying attention to transfer students can provide an opportunity to enroll more students with less ﬁnancial aid expenditures, plus oﬀer a more aﬀordable option for students to earn a four-year degree with less out-of-pocket costs and a lower debt burden. It’s a win-win venture. 28 | July 2008 universitybusiness.com http://universitybusiness.com

Table of Contents for the Digital Edition of University Business - July 2008

University Business - July 2008
Contents
College Index
Company Index
Advisory Board
Editor's Note
Behind the News
Viewpoint
Money Matters
Financial Aid
Human Resources
Students in Need, Schools at the Ready
Security Officers Speak Out
Advancement Goes Digital
A New Day for NASFAA
Sustainable Admissions
What's New
End Note

University Business - July 2008