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. 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

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

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? NEED Yield AID (FREE $) Yield

DATA-DRIVEN DISCOUNTING: SAMPLE YIELD TABLE Tuition =$15,000

COST BENEFIT ANALYSIS Current NTR 55 * ($15,000 - $10,500) = $247, * ($15,000 - $7,500) = $150,000 8 * ($15,000 - $4,500) = $ 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

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 % need met ranged 40% to 55% 2011% need met ranged 35% to 45% OT packaging changes OT Fresh Tuition$819,840$1,307,810$1,152,510 Inst Aid$368,350$429,330$457,500 NTR$451,490$878,480$695,010 DR Ave Pkg$11,510.94$8,762$11,159 Total Pkgd324941

COMBINED GOALS: FOCUSING ON NTR SAMPLE NTR BUDGET MODEL 2011 Tuition and fees$26,770 Total Institutional Grant Aid Number of Students Receiving Grant Discount Rate Net Tuition Revenue Gross Tuition Revenue Average Grant Award # in Class Estimated Conv. Of Students % Getting Aid Freshmen$3,928, $6,271,264$10,199,370$10, Freshmen attended before$669, $1,659,277$2,328,990$10, Sophomore$3,033, $5,827,310$8,860,870$10, Junior$2,548, $6,472,570$9,021,490$8, Senior$2,618, $7,152,417$9,771,050$8, Totals$12,798, $27,382,838$40,181,770$9, Deflation Factor = 96% for students; 97.4% for Grant Aid Annulized totals$12,466, $26,108,339$38,574,4991,441 Estimated 2012 Tuition and fees$27,975 Total Institutional Grant Aid Number of Students Receiving Grant Discount Rate Net Tuition Revenue Gross Tuition Revenue Average Grant Award # in Class Estimated Conv. Of Students % Getting Aid Freshmen$4,450, $7,019,399$11,469,607$11, Freshmen attended before$954, $1,816,728$2,771,169$10, Sophomore$3,424, $6,001,352$9,426,338$10, Junior$3,194, $6,064,767$9,259,609$10, Senior$2,970, $8,153,990$11,124,399$8, Totals$14,994, $29,056,236$44,051,122$10, Deflation Factor = 96% for students; 97.4% for Grant Aid Annulized totals$14,605, $27,684,058$42,289,0771,512

COMBINED GOALS: FOCUSING ON NTR SAMPLE NTR BUDGET MODEL

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

QUESTIONS? CHRISTINE SAADI Director, Student Financial Planning Alvernia University 400 Saint Bernardine Street Reading, PA (610) JEN WICK Enrollment Management Consultant Scannell & Kurz 71-B Monroe Avenue Pittsford, NY (585)