1. Scholarships and Aid Related to Undergraduate Education Ann J. Korschgen, Ph.D. Vice Provost for Enrollment Management Division of Enrollment Management January 27, 2015 Budget Allocation Advisory Council (BAAC )

2. Our Goals in Enrollment Management To recruit, enroll and support a student population that is high ability, diverse, growing in number, and generating net tuition revenue

3. How We Pursued Enrollment Goals  Started recruiting out-of-state in 2004  Improved customer service to prospective students through a CRM (Customer Relationship Management system) and other communication enhancements  Enhanced scholarship offerings to increase enrollments of targeted populations and to generate net new tuition revenue

4. Impact of Enrollment Management Strategy  Enrollment has grown from 23,666 in 2001 to 35,441 in 2014. An increase of 11,775 or 50%  Tuition revenue has grown from $69,576,261 in 2001 to $268,057,045 in 2014. An increase of almost $200,000,000 or 285%

5. Impact of Out-of-State Recruiting Efforts One example:  Out-of-state enrollment in 2004: 4,951  Out-of-state enrollment in 2014: 10,855  Increase: 5,904 students representing $85,023,777 in increased tuition revenue  Also Increased non-resident minority enrollment by 102% (2,772 students)

6. The Impact of Scholarships Faced increasing competition from other universities—especially SEC schools—that offer larger scholarships: What we did: For fall 2014 created new scholarship and increased others Result:  5.2% growth in first-time-college students (or 321)  26% growth in high ability students (ACT of 30+)

7. What are Scholarships? Scholarships are a way to:  Make college more affordable  Reward hard work in high school  Increase yield among admitted students  Collect more tuition revenue—i.e. many students would not attend if not for scholarships Evidence of importance : Fall 2013 and enrollment decline—with negative budget consequences—when competitors were offering more substantial scholarships

8. How We Model Scholarships to Increase Net Tuition Revenue  Identify target group of applicants – usually high ability admits, often from multiple years  Calculate descriptive statistics on enrollment, financial aid, etc.  Run statistical model on historical data that quantifies how gift aid affected yield rate for the group of admits  Use results of statistical model to predict change in enrollments from proposed changes in gift aid (e.g., add $1,000, remove $2,500, etc.)  Use costing model to determine how predicted changes in enrollment from changes to MU scholarships (discounts) would impact net tuition revenues  Predicted positive change in net tuition revenue is a necessary (but not sufficient) condition for implementing change to university scholarship

9. Debate on Discount Rate Definition: Percent of tuition revenue discounted for scholarships. Mizzou discount rate: 20%. (In 2002, it was 23%) Some schools may have lower rates, but:  Are of greater prestige  Or near mountains, oceans, or lakes  Or have lower tuition  Or have better state support  Or enroll lower ability students and don’t attract high ability students

10. What are the Discounts Due to Scholarships?  In 2014 it was $54 million.  Of that $39 million was performance based, $12 million was need based, and the remaining was for non-resident tax credit and other miscellaneous programs.  In fall 2014 net Tuition revenue was $213,628,487  In 2002, it was only $69,576,261

11. How Do We Award Scholarships?  The current recruitment environment necessitates automatic scholarships  Recruited students are used to immediate responses.  Automatic awards are based on test score and class rank.  Students are informed of awards in their admit letters.  Early notice is important in student yield

12. What Does It All Mean?  Scholarships have enabled us to shape our student body, grow our enrollment and increase very significantly our net tuition revenue.  However, to be effective, they have to be combined with strategic recruiting and modeling as have been done the last 12 years