Together we stand, without data we fall how focusing on NTR can build team between admissions and financial aid Christine Saadi, Alvernia University Jen Wick, Scannell & Kurz 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. 2. 3. 4. Are we perceived as worth the price we’re charging? Have we convinced our families that we are affordable? How much aid do we need to spend to meet our enrollment goals? 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 Institution A Institution B Institution C Institution D Institution E Institution F Institution G Tuition & Fees 2013-14 $32,776 $34,484 $41,510 $43,270 $44,210 $44,360 $44,551 Freshman Fall Estimated Discount 2013 Net Tuition Rate Accept & Fees 2011-12* Rate $13,897 57.6% 69.5% $19,449 43.6% 79.7% $27,231 34.4% 43.3% $18,520 57.2% 70.2% $27,101 38.7% 39.9% $29,588 33.3% 38.5% $25,439 42.9% 41.9% Fall 2011 SAT 25-75% 950 - 1170 950 - 1170 1120 - 1340 1065 - 1320 1220 - 1370 1240 - 1390 1190 - 1370 U.S. News Ranking 2013 (America's Best Colleges) NLAC below 150 NLAC #100-150 NLAC #51-99 NLAC #51-99 NLAC top 50 NLAC top 50 NLAC top 50 * Discount rate has been calculated using IPEDS data which, on occasion, have been found to be inaccurate. Sources - College/University website, U.S. News & World Report and IPEDS 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 Quality Highest 12,511 High 17,254 Medium 18,737 Lower 20,023 Lowest 20,044 Average 18,896 > 30k 20-30k 15-20k 10-15k 5-10k 12,304 17,237 18,997 20,104 20,049 18,071 11,975 14,543 16,075 15,614 16,433 13,243 0-5k Average 9,056 5,609 4,960 4,866 10,772 7,888 7,423 7,018 10,926 9,128 8,082 8,134 11,730 9,740 9,479 9,066 11,651 10,798 10,355 9,684 10,974 8,813 8,161 7,734 8,382 11,270 13,178 14,018 14,633 12,665 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? CLEARLY THE NEED FOR A DATA-DRIVEN APPROACH TO ANSWERING THESE QUESTIONS HAS NEVER BEEN MORE IMPORTANT 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 Need $0 Gift Aid > $12,000 $9,000-$12,000 $6,000-$9,000 $3,000-$6,000 $1,001-$3,000 $0 Tuition = $15,000 $1$5,000 $5,000$10,000 $10,000$15,000 $15,000$20,000 55/100 55% 20/80 25% 8/40 20% > $20,000 COST BENEFIT ANALYSIS Current NTR 55 * ($15,000 - $10,500) = 20 * ($15,000 - $7,500) = 8 * ($15,000 - $4,500) = $247,500 $150,000 $ 84,000 $481,500 Projected Enrollment (Average total grant $10,500) 220 * 55% = 121 Projected NTR 121 * ($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 Freshman Simulation Summary Table Enrollment Institutional Grant NTR Discount Avg. SAT % Female % Minority % In State % Pell Eligible Predicted Class Simulation Simulation Simulation Simulation (Baseline) #1 #2 #3 #4 312 305 278 296 342 $2,136,000 $1,903,000 $1,153,000 $1,654,000 $2,105,000 $4,229,000 $4,327,000 $4,516,000 $4,396,000 $4,883,000 33.5% 30.6% 20.3% 27.3% 30.1% 934 930 930 929 930 62% 61% 62% 61% 61% 19% 19% 20% 20% 20% 81% 82% 83% 82% 82% 30% 31% 31% 31% 32% 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 CASE STUDY: ALVERNIA UNIVERSITY Private, Catholic university located in Eastern PA Fall 2013 total enrollment:1500 400 new freshman/115 transfers Average SAT – 985 Male/Female Ratio – 28% Male/72% Female Out of state enrollment – Approx. 28% ORGANIZATION VP for Enrollment Management Dean of Admissions & Student Financial Planning Director of Admissions Direct Reports 15 Director of Student Financial Planning Direct Reports 8 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% need met ranged 35% to 45% OT packaging changes OT Fresh 2010 2011 2012 32 49 41 Tuition $819,840 $1,307,810 $1,152,510 Inst Aid $368,350 $429,330 $457,500 NTR $451,490 $878,480 $695,010 0.449 0.328 0.397 $11,510.94 $8,762 $11,159 32 49 41 DR Ave Pkg Total Pkgd COMBINED GOALS: FOCUSING ON NTR SAMPLE NTR BUDGET MODEL 2011 Tuition and fees Total Institutional Grant Aid Freshmen Freshmen attended before Sophomore Junior Senior Totals $3,928,106.00 $669,713 $3,033,560 $2,548,920 $2,618,633 $12,798,932 $26,770 Number of Students Discount Receiving Rate Grant 371 81 313 307 337 1409 Deflation Factor = 96% for students; 97.4% for Grant Aid Annulized totals $12,466,160 Net Tuition Revenue Gross Tuition Revenue 0.385 0.288 0.342 0.283 0.268 0.319 $6,271,264 $1,659,277 $5,827,310 $6,472,570 $7,152,417 $27,382,838 $10,199,370 $2,328,990 $8,860,870 $9,021,490 $9,771,050 $40,181,770 0.323 $26,108,339 $38,574,499 Average Grant Award $10,588 $10,160 $10,160 $8,393 $8,290 $9,084 # in Class 381 87 331 337 365 1501 Estimated Conv. Of Students 0.22 0.71 0.99 1.13 % Getting Aid 0.97 0.93 0.95 0.91 0.92 1,441 Estimated 2012 Tuition and fees Total Institutional Grant Aid Freshmen Freshmen attended before Sophomore Junior Senior Totals $4,450,207 $954,441 $3,424,987 $3,194,842 $2,970,410 $14,994,886 Deflation Factor = 96% for students; 97.4% for Grant Aid Annulized totals $14,605,019 $27,975 Number of Students Discount Receiving Rate Grant 402 90 323 314 354 1484 Net Tuition Revenue Gross Tuition Revenue 0.388 0.344 0.363 0.345 0.267 0.340 $7,019,399 $1,816,728 $6,001,352 $6,064,767 $8,153,990 $29,056,236 $11,469,607 $2,771,169 $9,426,338 $9,259,609 $11,124,399 $44,051,122 0.345 $27,684,058 $42,289,077 Average Grant Award $11,076 $10,588 $10,588 $10,160 $8,393 $10,106 # in Class 410 99 337 331 398 1575 1,512 Estimated Conv. Of Students 0.26 0.72 1.00 1.18 % Getting Aid 0.98 0.91 0.96 0.95 0.89 COMBINED GOALS: FOCUSING ON NTR SAMPLE NTR BUDGET MODEL Conversion of student population from year to year Freshman Attended Before Sophomore Junior Senior 2009 Actuals 0.27 0.72 1.05 1.19 2010 Actuals 0.24 0.78 0.99 1.11 2011 Actuals 2012 Averages AU Ave Used 2012-2015 0.22 0.25 0.26 0.71 0.74 0.72 0.99 1.01 1.00 1.13 1.15 1.18 Percentage of the class receiving grant Freshman Freshman Attended Before Sophomore Junior Senior 2009 Actuals 0.97 0.78 0.91 0.91 0.87 2010 Actuals 0.98 0.91 0.94 0.94 0.81 Annual Tuition Increase 2012 1.045 *used as estimate for increase of tuition through 2015 2011 Actuals 2012 Averages AU Ave Used 2012-2015 0.97 0.98 0.98 0.93 0.88 0.91 0.95 0.93 0.96 0.91 0.92 0.95 0.92 0.87 0.89 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 SAADI JEN WICK Director, Student Financial Planning Alvernia University 400 Saint Bernardine Street Reading, PA 19607 (610) 796-8356 Enrollment Management Consultant Scannell & Kurz 71-B Monroe Avenue Pittsford, NY 14534 (585) 381-1120 Christine.Saadi@alvernia.edu www.financialaid@alvernia.edu wick@scannellkurz.com www.ScannellKurz.com QUESTIONS?