The Influence of Financial Aid on Enrollment Outcomes
John W. Dysart
The Dysart Group
It is easy to overlook the impact of financial aid policy and process on your enrollment counts and the financial bottom line. The truth is that the details of your institutional approach to financial aid will definitely influence recruitment success, retention rates, net revenue and thus your operational options.
Take a few minutes to answer some questions on your financial aid outcomes for the Fall 2020 cycle. It has been an unusual year for many reasons, but the COVID-19 pandemic, new enrollment patterns and retention challenges make the questions more important than ever!
- Did you have any new or returning students this Fall who enrolled without financial aid packages or with required documents still outstanding?
This is an unacceptable outcome for the student and for the institution. Students starting classes without a package or with outstanding required forms risk incurring substantial costs with no ability to pay. The usual outcome is students being forced out of school with outstanding balances. This prevents them from re-enrolling at your school and will likely kick them out of higher education for life, as most colleges and universities refuse to issue transcripts for students with unpaid balances.
- Were your final institutional aid expenditures not in line with your projections six to nine months ago?
If you do not have an award policy and institutional aid scholarship and grant programs that support accurate expenditure projections, then you have a problem. Financial aid outlays are not a crap shoot and well designed and effectively monitored institutional aid programs are relatively easy to budget.
- Did the amount of institutional aid expenditures this Fall come as a surprise?
Again, there should never be surprises regarding institutional aid expenditures. Expenditure surprises are a sure sign of a flawed design or lack of tracking.
- Are your net tuition revenue proceeds declining? Is your discount rate increasing without any corresponding growth in retention or the number of new students?
It is not necessarily a problem if aid expenditures increase and increases in the discount rate are not always avoidable. The key is understanding the reasons in advance and establishing appropriate policies and practices. If, for example, you are seeking to increase diversity, you may spend more in institutional aid. Unavoidable market realities like the current pandemic may result in higher discount rates as aggregate financial need grows. Look out for increased expenditures or higher discount rates that are not planned in advance or are not in line with institutional goals and priorities.
- Do you have concerns about the timing and amounts of your “merit” scholarships and whether these programs are generating interest in your institution and positively influencing new student enrollments?
Merit scholarships and grants can be a powerful tool to generate interest, applications and enrollments. Have you conducted reviews to determine whether the structure and timeline of your current programs are effective?
If you answered “yes” to any of these questions, it is time to review your financial aid operations to ensure that they actively support your recruitment and retention efforts, as well as provide sufficient revenue. Don’t hesitate to seek advice and counsel from outside enrollment professionals during these challenging times.