The Obstacle to Retention and Graduation No One Talks About

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John W. Dysart
The Dysart Group

If the majority of your enrollments are first time freshmen, this is an issue you are unlikely to confront. If your institution, however, recruits and enrolls a large number of adult students and/or transfer students, federal and state financial aid lifetime maximums are probably going to impact the ability of many new, prospective students to enroll. Further, it could serve as a substantial barrier for your currently enrolled students to continue enrollment and/or graduate.

Students in this country often elect to transfer to another college or university. Students decide to transfer for a variety of reasons:

  1. Lack of Academic Success
  2. Financial Problems
  3. Changes in Major
  4. Job Loss
  5. Family Difficulties
  6. Social Fit

Regardless of the reasons, the numbers are significant. Studies indicate 37% of students transfer to other institutions. The COVID19 pandemic is likely to increase transfer rates further over the next year or two.

The issue is compounded when students transfer multiple times. Nearly half of the students who transfer (45%), will do so more than once.

The challenge, particularly for transfer students, is that taking longer to graduate increases the probability of reaching lifetime financial aid limits. It happens more often than you might think.

For the neediest students, there are lifetime limits on Federal Pell Grant eligibility. Essentially, Federal Pell Grant eligibility is limited to six years for full-time students.

Student lifetime borrowing under the Federal Direct Loan program is limited by federal regulation. Aggregate borrowing limits for “dependent” undergraduate students peak at $31,000.

Borrowing limits also apply to independent, undergraduate students. Their maximum is$57,000.

It is easy to see how some students might reach their aggregate limits due to poor academic advising, changes in major or lack of academic success in particular courses. Students can encounter difficulties even while attending a single college or university.

Aggregate limits are not just a challenge with federal financial aid programs. Most of the states impose similar limits on state-funded scholarships and grants. Aggregate limits are much more likely to occur for transfer students; even courses successfully completed at another institution may not apply toward a degree at a new institution.

For the new students who require financial aid in order to enroll at your institution or continue progress toward a degree at your institution, lifetime limits can serve as a real barrier making it impossible for many students to complete their education. The negative impact of such limits hurts colleges and universities as well, as revenue is lost when students are unable to initially enroll or begin a program but are unable to complete. In addition, retention and graduation rates are reduced. Your institution may be facing this issue and it is possible that senior leadership is unaware. Take a few minutes to touch base with your Director of Financial Aid to find out if you are losing new students, or failing to retain currently enrolled students, due to lifetime maximums.

What Can Be Done?

Most colleges and universities have no strategies in place to deal with this issue. If your institution recruits a large number of transfer students, there are some steps you can take to help them.

Improve Academic Advising

The most effective thing you can do to reduce the number of students facing aggregate financial aid maximums is to improve your academic advising. Often, the problem is caused by well meaning academic advisors who may be versed in the requirements for particular majors but are just not equipped to understand the details of how course selection can negatively impact financial aid eligibility. Individuals lacking a detailed understanding of financial aid satisfactory academic progress requirements, and state and federal aggregate program limits, have no business serving as academic advisors.

Require Academic Advisors to Understand Satisfactory Academic Progress Regulations for Federal and State Financial Aid

It is not too late to change your institutional training requirements for faculty and staff serving as advisors. The important knowledge regarding progress and financial aid programs can be learned. As such, it should be a requirement for the job.

Liberal Transfer Credit Policies

Colleges and universities can mitigate the odds for students running up against aggregate financial aid program limits by instituting transfer policies allowing for a more liberal acceptance of transfer credits. Colleges and universities often make students retake courses they have completed elsewhere. Take the time to reconsider your internal policies on transfer credits and err on the side of acceptance.

Low Residency Requirements

It is not unusual for colleges and universities to require 60 or more credits be completed at their institutions in order to graduate. This is excessive and guarantees that many students will need to spend additional terms enrolled. Dropping the residency requirement to 24 or 30 credits would go a long way toward reducing the number of transfer students who reach aggregate limits for financial aid programs.

Prepare to Invest More Financial Aid Dollars

You may wish to set aside additional funds, or create a new grant program, to address need gaps for students who have reached aggregate limits. It is a shame to have academically successful students forced to drop out one or two semesters before completion due to lifetime financial aid limits. While this new fund will require additional resources, it is worth the investment if it improves retention and graduations rates.

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