Co-authored with Sylvia Ewell, Associate Vice President, RNL
College funding is an important topic of conversation, especially as we enter the “earnings season” of fall 2023. If you have college students, you know that the communication around funding your child’s education is often confusing, even for those of us in the industry. We visited one campus that sent their cost of attendance in one letter and then followed up a few weeks later with an aid letter that assumed the family could reference the first letter to generate the final cash. For students and families who are not used to the rules and processes of higher education, this can be the moment when they decide that higher education is not worth it. That’s a problem!
You can’t afford to lose potential students to affordability
In recent years, college participation rates have declined due to the ubiquity of jobs for unskilled workers. According to the U.S. Bureau of Labor Statistics, median wage growth for 16-24-year-olds was around 13 percent through most of 2022, much higher than the 4 percent growth seen in 2010-14. The historically low unemployment rate in the US, along with minimum wage legislation, has forced companies to compete with higher education for the post-secondary market like never before in our modern history. This means that we who are charged with marketing and recruiting this generation of students and their families must make sure we are appealing to all students in order to meet our enrollment goals and fulfill our mission. Student populations that are low-income, first-generation, and underrepresented have always been important for colleges to attract, but they are now essential if you want to meet your institution’s enrollment goals and mission.
Are you making college funding and awards understandable to the students who need it most?
RNL recently released the Family Engagement in University 2023 report, which outlines some important distinctions to consider when creating college funding communications. In the report, these were the students’ families most likely to indicate that paying for college would be difficult:
- First generation
- Income under $100,000
- Those with students in their first year of college
However, the same groups that need financial aid more are also more likely to indicate that financial aid communication from colleges is confusing. So these students both need information more desperately and are more likely to be confused by it—if they actually get information about college funding.
The report also asked families about their satisfaction with the help provided by the institutions. Families with incomes just above the Pell eligibility level reported greater dissatisfaction with the level of assistance. This is a very important group that universities need to consider if they want to increase student numbers. These students often look the same as Pell students, but have a greater unmet need. Need-based aid aimed at this group could dramatically impact the incoming class.
4 recommendations to better serve students and increase your revenue
If you’re an institution looking to better serve students while meeting your enrollment goals in the coming years, consider these recommendations:
- Make your financial aid offer letter clear and state that the family is expected to pay. We were at one campus that had a large student body that they served because of their location in a large metro market. The institution told us there is no need to make financial aid awards clearer because students have “figured out” the way they have given aid over the past several decades. This is simply not the case and it is important that you definitely improve in this area!
- Consider using other media to deliver financial messages. Most schools leave a lot of work to be done on a flat, white, piece of paper that has limited ability to explain important concepts in the process. Even such simple concepts as “grants” or “loans” are often misunderstood by families. For example, RNL has developed personalized financial aid videos that not only explain what a student’s individual package is, but also end with a value proposition explaining why college is worth the investment.
- Offer letters must be posted EARLY! Try to get them out before Thanksgiving if possible so that some college discussion can happen while families get together for the holidays. But we are at too many campuses that still don’t send out awards until late March or April. For lower-income students, this leaves too little time to review the offerings and make affordability decisions. Note: With changes to the simplified FAFSA for the 2023/24 cycle, campuses should be ready for late access to the FAFSA – possibly as late as January.
- Be careful with indirect costs. Students compare college costs and don’t always compare apples to apples. Indirect costs like books, travel, and off-campus housing are great to share, but be careful not to accidentally force students to compare your tuition, room, board, and fees to other colleges’ tuition and fees. the way you present the numbers online or in offer letters.
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Want to find the right compensation strategies that can help families finance college while helping you meet your enrollment goals? Let’s talk. Contact us and we can set up a time to discuss enrollment and financial aid strategies that will help you and the students you serve.
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