Education is Important:  The Challenges of Financial Aid

First, a little stroll down Memory Lane — in the 1980’s and 90’s, the cost of attending private institutions outpaced the inflation rate, making it harder for institutions to enroll students. The cost was far greater than what families could afford, and financial assistance was limited. If institutions discounted themselves too much, revenue lagged, and students couldn’t receive the educational experience needed to succeed in the workforce. As a result, leveraging aid was used to help campuses enroll the number of students needed, control discounting and financial aid costs, and meet revenue and budget needs.  Correct financial aid modeling was still in the future.

Financial Aid Data and Correct Modeling

As our data collection and mining have become more sophisticated, institutions are able to develop aid models based on past enrollment data to optimize awarding on a per-student basis. Developing a personalized aid model and identifying and finding the right fit students for your community go hand in hand.

Every year it becomes more challenging to meet conflicting institutional demands. Colleges and universities want to enroll a diverse, academically talented class while balancing their discount rate and increasing revenue. The challenge is to find the right fit student and provide enough funding for them to enroll and graduate.  In business terms, minimize overspending on student populations that would already enroll, increase award offerings to desired populations that require and would benefit from an extra push, and increase yield while lowering the discount rate.

Financial Aid modeling allows institutions to motivate students who are the right fit while also balancing the cost of educating the student body as well as the fixed operating costs of the institution. When this formula is successful, colleges and universities are well on their way to financial health, offering a diverse student body the opportunity to have an engaging and meaningful education that provides opportunities to succeed in the workforce. So, what does it take to make this model work?

1. Identify your goals (Net Revenue, Headcount, Diversity, Academic Quality, etc.) in order of importance to properly set your aid strategy
2. Define your right fit student population based on internal geodemographic data of enrolled classes, retention data, social and educational information, external market data (regional and national), and enrollment data.
3. Define and articulate your value to the most diverse generation of students in modern American history, keeping in mind that for them the purpose of college is to help launch a career.
4. Analysis of historical data will help you identify and enhance existing markets and identify new markets. Increase your desired student population using tools and outreach that resonates with GEN Z and improve yield by building upon established relationships with counselors and the campus community.
5. Put targeting strategies in place so you can set your focus on those students who fit your enrollment needs and have the greatest likelihood of enrolling
6. Getting your Scholarships and Grants out early lets students know you value what they bring to their educational experience and your community.

Establish Financial Aid Strategy Based on Your Mission and Vision

Setting your financial aid strategy based on the students who best fit your institution’s mission and vision while including input from all areas of the community will lead to successful alumni. In return, your alumni will support and help you grow and better serve your institution’s community of learners.

focusEDU Can Assist

focusEDU has the financial aid expertise to conduct an assessment and evaluation of your strategic aid packaging strategies and institutional financial impact of your current configurations.  Click here to contact us for a discussion.  We can help.