Enrollment Management

[March Madness] Enrollment Management

Imagine, if you will, the high school senior that creates a tournament bracket similar to college basketball and seeds each of his potential college suitors in accordance with his interest.  Then, one by one he pits each school against one another using financial aid as the sole contributing factor to the decision on which college or university moves on to the next round.  (I saw something similar to this in our student affairs office last year when a college senior created a bracket during March representing his law school choices.)  As an enrollment management professional at a private, independent college and obviously not knowing explicitly who my institution is competing with, a process like this would make me cringe.

In the admission and financial aid office at Doane College, March 13th represents the date when we make our first official financial aid offers to prospective students.  We will mail over 400 financial aid awards representing over half of the total number of awards we will make this recruiting cycle.  And, when you consider that our first “wave” of financial aid awards accounts for roughly 60% of our anticipated class, it makes sense that this is a big deal.

March is maddening, particularly in this day and age in higher education and this would be true without college basketball!  I’ve discussed in previous posts the challenges of merit aid, price, cost, and tuition.  Financial aid is a beast and a blessing in enrollment management.  No two schools develop their financial aid policy and strategy the same.  As a result, all who want to make apples to apples comparisons with financial aid awards are easily frustrated.  A consequence of this process is an increasing demand for financial aid negotiations between potential students (or the parents) and the college.  At times it’s laughable because I often see those who have the greatest ability to pay for college lobbying for the greatest amount of aid.  But, then I ask myself, “Who could blame them?”  Just because people have wealth doesn’t mean they are any more interested in parting with it.  Nevertheless, I often hear more appeals for families with the financial resources than I do for those that do not.

Those in enrollment management understand that financial aid can be very complicated and therefore isn’t always the easiest to explain to families.  Even if you can articulate your institution’s philosophy and process, good luck helping a family understand why their Expected Family Contribution is $20,000 as defined by the FAFSA.  Who hasn’t heard the comment, “I don’t have $20,000 in the bank to pay for Junior’s college each year!”?  I suppose the saving grace is to share that the EFC is calculated the same for everyone and therefore each school is using the same information.  Unfortunately, that doesn’t provide families with much comfort.

So, how does an admission counselor navigate the March Madness bracket with a prospective student in the event they focus largely on the financial aid award?  As a private, independent college, how can we compete with the local community college on price?  If you draw that match-up do you simply throw in the towel?  How about if you draw the local state institution?  Maybe you have a chance if the student isn’t getting any aid from the state school.  But what if you draw another area competitor; similar college if you will?  Slam dunk, right?  Hmmm, not so fast.  In the end, we must to talk about value.  We cannot let it be only about cost even when we know that is a significant issue.

Let me share a brief story.  A father visits Doane College with his son.  During the visit they indicate that they have received an “offer” from another private, independent college in the state totaling more than our offer.  When asked for the details of the offer in order to determine if we could find a way to be more competitive, the father indicated that he doesn’t work that way.  He is a farmer and he likened his son’s college choice to a recent purchase of a tractor. He shared, “When I need a tractor, I go to two businesses and ask for the best price on a tractor.  Whoever gives me the best offer gets my business.”  I asked the father, “Sir, were both tractors John Deere?”  He indicated that both were Case to which I replied, “Sir, in your example, what if you were comparing Case to John Deere?  Would price be your only comparison point?”  I would bet that John Deere and Case reps would work hard to argue the differences in their tractors if given the chance.  That being said, if from the beginning this farmer knew that he wanted a Case, the fact that we are John Deere is irrelevant because it’s very possible that we don’t have what you want.  Comparing Doane College to another school based only on financial aid is shortsighted and assumes that everything else is equal.  A better financial offer from us may make your decision more difficult but it sounds like this farmer and his son had already decided what they wanted.

March Madness in higher education admissions seems to be all about financial aid and less the importance of fit and comfort in a college choice.  As colleges, we create financial aid awarding strategies in order to provide enough financial aid to make enrollment possible for a target amount of prospective students while also anticipating resulting revenue.  Ultimately, our awards will not be the best award for every student.  It doesn’t (and can’t!) work that way.  But, we want to be right for 350 first-year students for sure!

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Enrollment Management

FAFSA Rank Dilemma

Quick, list five of your favorite vacation destinations.  Don’t over-think it and don’t worry about priority order.  Now, once you’ve listed each destination go back and give them a rank order.  Does the order change much from your initial list?

I believe if I would do this activity with a large group of people, the priority order (particularly the first and second destination) would remain the same.  While I’m no psychologist, I think it’s human nature when asked to provide a list – even without any type of ranking expectations – we subconsciously prioritize our responses.

So, what does this have to do with enrollment management?  Right now all over the United States, students and families are completing the Free Application for Federal Student Aid (FAFSA).  On this application, students are invited to release their FAFSA information to potential college suitors.  The paper version of the FAFSA allows for a student to send information to four schools while the electronic application allows for up to ten schools.  To be clear, the application does not require students to identify colleges in priority or rank order.  But, “for state aid”, they do suggest that a student may choose to put their preferred college first.  Here is a great article that illustrates this particular component of the application.

Colleges and universities have come under a bit of scrutiny as of late for attempting to leverage the rank order influence enrollment, creating a strategy around the rank location of their institution on the student’s FAFSA.  Here is a great article highlighting how some colleges utilize the FAFSA data. A Noel-Levitz analysis of 153 of their campus partners provides some great data on enrollment actions relative to FAFSA rank position.  The resulting data shows that students chose the first school listed on the FAFSA by an overwhelming margin (64%) even though they can list up to 10 schools.  There are those critics who question whether the rank position should be shared with colleges by FAFSA suggesting that it is private information.  Moreover, given that the rank position is currently shared, what is an ethically acceptable way for a college to use the information? 

Colleges have been monitoring and assessing FAFSA data for some time, but rarely have I seen colleges make public how they use the information, let alone if they use the information strategically.  Is it wrong for a college to take advantage of this information?  I’ve considered the opinion of those who believe the rank order is private information and therefore should not be shared with colleges.  Personally, as an enrollment leader at Doane College, I’m a proponent of using every bit of available data possible to enroll a class.  For my institution, the yield on students who have put us in the first FAFSA location has been between 64% and 68% the last three years.  However, yield on students who have put us in the second FAFSA location has been varied more greatly between 14% and 25%.  Not surprisingly, students who put us in the third location or lower, yield at a very low rate.  Therefore, the Doane College data supports the Noel-Levitz analysis. I think it makes perfect sense that if we are number 8 on a student’s FAFSA, it’s unlikely that the student will enroll at Doane.  I’m not sure we really had much of a chance with that student.

A component of the privacy issue is the notion that colleges use the information unethically.  An example could be the practice of providing students less aid if a student lists your school first on the FAFSA.  In theory, if you are the student’s first choice, you may not need to give them as much aid to enroll as a student who lists you in the number two position.  This is a possible tactic.  However, I think it’s a risky decision by a school and a practice that I’m not sure many schools are willing to test.  It stands to reason that a school knowing the lower yield on lower rankings may try to increase yield in other areas, but not necessarily at the expense of what yields well.  In this vein, I’ll share two important questions reflecting on recent Doane College FAFSA data.

#1 – Why is Doane losing 32%- 36% of those that put Doane in the first location?

#2 – Why did Doane see such a significant change in yield from one year to the next with those that put Doane in the second location.

FAFSA position data for individual students helps me answer these questions.  For both questions, I evaluate the schools that Doane College was competing with (or who also received the student’s FAFSA information).  Although this will not tell me the complete story, it will help me to understand if I was competing with another in-state private college on students who put me as #1 but did not enroll.  It will also tell me if I was competing with public university on students who put me as #2 but did not enroll.  In fact, the data gives me a great idea regarding the competition with individual students, but it is short-sighted to think there were no other factors in the student decision, much of which can’t be learned by FAFSA ranking.  Nevertheless, couple FAFSA information with additional data we have internally and a more clear picture can emerge.

I believe that while the FAFSA does not explicitly ask students to provide the schools in any particular order, students are inclined to list schools in order of their interest at the time of the FAFSA filing.  I see nothing wrong with this and believe even if FAFSA added the statement explicitly stating that order does not matter, it’s likely that the order and ultimately yields based on these orders would not change substantially.  All this being said, colleges use the data that is available to them to assist in meeting enrollment objectives.  In the event this data becomes unavailable to colleges, enrollment managers will be forced to adapt.  Personally, I don’t consider this an ethical dilemma.

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