College Financing: Meeting Family Needs While Meeting Your Enrollment Goals

Co-authored with Dr. Eric Groves

College financing is an important topic of conversation, particularly as we enter “yield season” for the fall 2023 incoming class. If you have college-aged students, you know that communication around financing your child’s education is often confusing, even for those of us who work 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 their aid letter, which assumed that the family could reference the first letter to develop a final out-of-pocket cost. For students and families who are not accustomed to higher education’s rules and processes, this could be the moment that they decide higher education isn’t worth it. That is a problem!

You can’t afford to lose potential students because of affordability

In recent years, college participation rates have dropped, due to the ubiquity of jobs for untrained workers. According to the U.S. Bureau of Labor Statistics, the median wage growth for 16-24 year-olds hovered around 13 percent for most of 2022, much higher than the 4 percent growth seen between 2010-14. The historically low jobless rate in the U.S., along with minimum wage legislation, has driven companies to compete with higher education for the post-high school market like never before in our modern history. That means we who are charged with marketing and recruiting this generation of students and their families need to make sure we are appealing to all students, to achieve our enrollment goals and fulfill our missions. Student populations that are low-income, first-generation, and underrepresented have always been important for colleges to attract, but now they are essential if you want to meet your institution’s enrollment goals and mission.

Are you making college financing and awarding comprehensible to the students who need it most?

RNL recently came out with the 2023 University Family Engagement Report, which notes some important disparities to consider as you develop communications about college financing. In the report, these were the families of students who were most likely to indicate that paying for college would be difficult:

• Black
• Hispanic
• First-generation
• Income under $100k
• Those with students in their first year of college

However, these same groups who are in greater need of financial assistance are also more likely to indicate that financial aid communication from colleges is confusing. So these students both need the information more desperately and are more likely to be confused by it—if they actually receive information about college financing.

The report also asked families for their satisfaction with the aid provided them by institutions. Families with incomes just above Pell eligibility reported more dissatisfaction with their level of aid.This is a very important group for universities to consider if they want to grow enrollment.These students often look just like Pell students, but they have greater unmet need. Need-based aid, directed to this group, could impact the incoming class dramatically.

4 recommendations to better serve students and boost your yield

If you are an institution that wants to serve students better in the coming years while also meeting your enrollment goals, consider these recommendations:

1. Make your financial aid offer letter clear, with a bottom line that the family is expected to pay. We were on one campus that had a large group of students they served because of their location in a major metro market. The institution told us they didn’t need to make the financial aid award more clear because students had “figured out” the way they had been presenting aid for the last several decades.That just isn’t the case and it is important to make sure you up your game in this area!
2. Consider using other mediums to deliver financing messaging. Most schools leave a lot of work to be accomplished by a flat, white, piece of paper, that has limited ability to explain important terms in the process. Even terms as simple as “grants” or “loans” are often misunderstood by families. RNL, for instance, has developed Personalized Financial Aid Videos that not only explain what a student’s individual package is, but also ends with a value proposition explaining why the college is worth their investment.
3. Offer letters need to go out EARLY! Aim to get them out before Thanksgiving, if possible, to allow for some of that college discussion to occur while families are gathered for the holidays. But we are on far too many campuses that are still not sending awards out until late March or April. For lower-income students, this gives them far too little time to review the offer and make decisions about affordability. Note: With the changes to a more simplified FAFSA for the 2023/24 cycle, campuses should be prepared for late access to FAFSAs—possibly as late as the end of January.
4. Be careful with indirect costs. Students compare college costs and don’t always compare apples to apples. Indirect costs such as books, travel, and off-campus living are fantastic to share, but be careful that you aren’t accidentally forcing students to compare your tuition, room, board, and fees to other colleges’ tuition and fees, due to the way you present figures online or in your offer letters.

Find the right awarding and communication strategies

Want to find the right awarding strategies that can help families with college financing while helping you meet your enrollment goals? Let’s talk. Reach out and we’ll set up a time to discuss enrollment and financial aid strategies that will help you and the students you serve.