Together we stand, without data we fall

How focusing on NTR can build team between admissions and financial aid

Christine Saadi, Alvernia University

Agenda

• Partnership between Admissions and Financial Aid

• Using Data to Set Awarding Policy• Case Study

Why is a Partnership Important?

• Communicating affordability• Providing excellent customer service• Developing mutually supportive

processes• Ensuring strategies that support

enrollment goals

Focus on NTR,

Not Just Class Size or the Aid Budget

• Admission’s goal is not just the number and mix of students

• Financial Aid’s goal is not just staying in budget• Keeps admissions and financial aid on the same

page• Remember to think long term – new students’

discount rate will affect the overall discount rate

Use Data, Not Anecdote

to Establish Aid Policies

• Keeping an “ear to the ground” plays a role, but that should not be the foundation of your awarding strategies.

• Using analytical approaches to understanding student responses to your aid offers is where your strategy needs to begin.– Table analysis– Predictive modeling– Simulation tools

To Assess How Effectively Your Aid Program is Currently

Responding to Market Forces, There are 4 Key

Questions to Answer

1. Are we perceived as worth the price we’re charging?

2. Have we convinced our families that we are affordable?

3. How much aid do we need to spend to meet our enrollment goals?

4. How can we be sure we are spending our aid wisely?

Question #1: Are We Perceived as Worth

the Price We’re Charging?

• Monitor trends in your pool• Identify your competition• Benchmark against the competition• Define your institutional advantage• Gather and share outcomes data

Sample Benchmarking

College/University

Tuition&

Fees2013-14

Estimated Net Tuition

& Fees

FreshmanDiscount

Rate2011-12*

Fall2014

AcceptRate

Fall2012SAT

25-75%

U.S. News Ranking 2014

(America's Best Colleges)

Institution A $32,776 $13,897 57.6% 69.5% 950 - 1170 NLAC below 150Institution B $34,484 $19,449 43.6% 79.7% 950 - 1170 NLAC #100-150Institution C $41,510 $27,231 34.4% 43.3% 1120 - 1340 NLAC #51-99Institution D $43,270 $18,520 57.2% 70.2% 1065 - 1320 NLAC #51-99Institution E $44,210 $27,101 38.7% 39.9% 1220 - 1370 NLAC top 50Institution F $44,360 $29,588 33.3% 38.5% 1240 - 1390 NLAC top 50Institution G $44,551 $25,439 42.9% 41.9% 1190 - 1370 NLAC top 50

Sources - College/University website, U.S. News & World Report and IPEDS* Discount rate has been calculated using IPEDS data which, on occasion, have been found to be inaccurate.

Question #2: Have We Made the Case for Affordability?

• Do you lose your overlap with public institutions as you progress through the admissions cycle?

• Has the distribution of applicants by socioeconomic level changed over time?

• How does the level of need and unmet need impact yield rates and retention rates?

Question #3: How Much Aid Do We Need to Spend

to Meet Enrollment Goals?

• It DEPENDS!!!• If at capacity, the focus should be trade-offs.• If not at capacity, the priority has to be

maximizing net tuition revenue.• The institution’s long-range strategic plan

needs to include a plan for enrollment.

But What Drives the Discount Rate?

• Market Forces (i.e., the competition)• Changes in Ability to Pay

– Trends in family contributions– Percentage of students applying for aid

• Changes in Willingness to Pay– Yield by need level and grant level

• Changes in Outside Support• Retention by Need Level and Grant Level• How you build your pool• Institutional Goals

– Commitments to diversity, quality, etc.

Net Tuition Revenue Table -- Tuition $21,000

EFC Non Filers > 30k 20-30k 15-20k 10-15k 5-10k 0-5k Average

Highest 12,511 12,304 11,975 9,056 5,609 4,960 4,866 8,382 High 17,254 17,237 14,543 10,772 7,888 7,423 7,018 11,270 Medium 18,737 18,997 16,075 10,926 9,128 8,082 8,134 13,178 Lower 20,023 20,104 15,614 11,730 9,740 9,479 9,066 14,018 Lowest 20,044 20,049 16,433 11,651 10,798 10,355 9,684 14,633 Average 18,896 18,071 13,243 10,974 8,813 8,161 7,734 12,665

Quality

Question #4: How Can We Be Sure We Are Spending

Our Aid Wisely?

• Are you under-funding need-based grant programs?

• Are you focusing institutional aid too heavily on merit programs or is the merit aid focused on the wrong applicant segment?

• How much revenue is lost by offering entitlements?

• The competition is offering aggressive merit programs; should you respond?

Using a Data-Driven Approach to Answering

These Questions

• The challenge will be to balance often conflicting enrollment goals.

• There is a need for more sophisticated means to fully understand the tradeoffs and the impact of various strategies.

• Institutions can’t afford to get it wrong.

Data-Driven Discounting

• Are there market segments where the “universal truths” don’t hold?

AID(FREE $)

Yield

NEED Yield

Data-Driven Discounting:

Sample Yield Table

$0$1-

$5,000$5,000-$10,000

$10,000-$15,000

$15,000-$20,000 > $20,000

> $12,000$9,000-$12,000 55/100 55%

Gift Aid $6,000-$9,000 20/80 25%$3,000-$6,000 8/40 20%$1,001-$3,000

$0

Need

Tuition = $15,000

Cost Benefit Analysis

Current NTR55 * ($15,000 - $10,500) = $247,50020 * ($15,000 - $7,500) = $150,000 8 * ($15,000 - $4,500) = $ 84,000

$481,500Projected Enrollment (Average total grant $10,500)

220 * 55% = 121

Projected NTR121 * ($15,000 - $10,500) = $544,500

Predictive Modeling

• Predictive modeling, also known as econometric modeling, allows you to better understand these tradeoffs and present alternatives to institutional decision-makers

• Modeling allows you to test assumptions and interactions before taking action

Goals of Econometric Modeling

• Identify factors that are important in the enrollment decision

• Determine the impact of institutional grants on the probability of enrolling

• Determine the revenue-maximizing levels of grants

• Identify alternative financial aid packaging strategies

• Simulate the results of alternative admissions and aid strategies and policies

Sample Simulation Summary

Predicted Class

(Baseline)Simulation

#1Simulation

#2Simulation

#3Simulation

#4Enrollment 312 305 278 296 342Institutional Grant $2,136,000 $1,903,000 $1,153,000 $1,654,000 $2,105,000NTR $4,229,000 $4,327,000 $4,516,000 $4,396,000 $4,883,000Discount 33.5% 30.6% 20.3% 27.3% 30.1%Avg. SAT 934 930 930 929 930% Female 62% 61% 62% 61% 61%% Minority 19% 19% 20% 20% 20%% In State 81% 82% 83% 82% 82%% Pell Eligible 30% 31% 31% 31% 32%

Freshman Simulation Summary Table

There are a number of analytical techniques that are of value in managing

financial aid strategically:• Watch and analyze trends• Know what the competition is doing –

benchmark• Track the behavior of subpopulations – their

yields and mean values as well as retention rates

• Utilize econometric modeling techniques to test tradeoffs between goals

High School Graduation Change

Enrollment Trends

• Families are increasingly price sensitive– Average family spent less on college in 2012-13 than in 2009-

10. (Sallie Mae’s “How America Pays for College” survey)– In 2013 only 57% of students admitted to first choice

institution chose to attend it. Cost and aid were significant influencers of that decision.

• (The American Freshman—National Norms for 2013.)

• Many private institutions have seen their discount rates increase without corresponding increases in enrollment.

– This has contributed to both Moody’s and S&P releasing negative outlooks for higher education

Case Study: Alvernia University

• Private, Catholic university located in Eastern PA

• Fall 2014 total enrollment:1553– 380 new freshman/87 transfers– Average SAT – 976– Male/Female Ratio – 28% Male/72% Female– Out of state enrollment – Approx. 25%

Collaborating on Affordability Messages

• Designing the right Net Price Calculator– What is your goal for use: meet Dept of Ed

requirements or as an enrollment tool?– Simplicity vs. accuracy– Work with Admissions to create NPC– Get your marketing department involved– Front-and-center or buried on website

• Alvernia advantage

Using Predictive Modeling to Develop

Aid Strategies• Nursing & OT packaging vs. other programs• Decision to change OT in 2011

2010 % need met ranged 40% to 55%2011-2014 % need met ranged 30% to 45%OT packaging changes

• Recommendation to return to one packaging matrix for 2015-2016

Successful enrollment management must include a

partnership between admissions, financial aid, and the data.

• Making the case for affordability and value

• Supportive, efficient processes and quality customer service

• Effective strategies to achieve enrollment goals

Christine SaadiDirector, Student Financial Planning

Alvernia University400 Saint Bernardine Street

Reading, PA 19607(610) 796-8356

Christine.Saadi@alvernia.eduwww.financialaid@alvernia.edu