1. Tuition Discounting Analysis Peter J. Partell, Director of Institutional Research Binghamton University State University of New York April 2002

2. IR’s Roles related to tuition discounting, admissions, and financial aid Estimating the number of scholarship offers to make in order to reach goals/remain within budget constraints based on best information available about yield rates Assess effectiveness of scholarship offers/tuition discounts -- This is about yield enhancement Provide guidance on how to set up a system of scholarship offers that can maximize funds/prevent (or halt) wasteful spending.

3. Estimating Enrollment Pull together data on yield rates – if first time giving institutional aid, use yield rates for foundation scholarships, if you have them. caution - understand how foundation offers are made-they are often handed out to eligible students who have already committed to enroll - not used as a yield enhancer – if not the first time, then use yield rates of past recipients as your guide – you may have to guess the first time around

4. Example For the past two years, University X has given out $2,000 scholarships to 50 of its top applicants How many applicants should be offered scholarships and how far down into the applicant pool do we need to make offers to spend 100k? Because we do rolling admissions, we do not have all applicants before us when making these decisions--we need to estimate application numbers within the scholarship range

5. Scholarship Projection Worksheet Available apps is continually monitored and updated based on year- to-date reports. This example does not provide a sufficient control group.

6. Assessing Effectiveness Do not confuse enrollment growth and/or increased yield with scholarship effectiveness.

7. Merit aid program begun in 2000. No merit aid given in 1999.

8. First look at the data... Yield rates increased among groups offered the merit aid.

9. Look at 2000 Offers in more detail... Yield rates are the same for merit offers and non-merit offers! Scholarships not responsible for the observed increase in yield. Higher yield rates do not always mean successful scholarship offers.

10. How to assess scholarship effectiveness Multivariate analysis of yield Logistic regression (feel free to use Probit, too) Dependent variable is whether an applicant enrolled or not. Independent variable is whether scholarship offered (or scholarship amount offered if there is enough variance in amounts) Control for confounding influences on yield, such as academic preparedness, state residency, other financial aid, etc. “Other things being equal, did scholarship offers increase the likelihood of students enrolling?”

11. Logistic Regression Results

14. Price Sensitivity My presumptions: – Filing a FAFSA signals price sensitivity--Not filing a FAFSA signals price insensitivity – Responding to a scholarship offer signals price sensitivity. Not responding to a scholarship offer signals price insensitivity. – I found these results counter-intuitive, because the people whom I thought were signaling insensitivity acted sensitive and those signaling sensitivity acted insensitive (to price, that is)

15. Lessons Learned How to waste money: – Self-selection problems – bad timing - offering after student makes up his or her mind – forgetting about control groups - can’t answer “how much is enough?” It doesn’t have to be all or nothing - go slowly