I already know before I write this – a lot of my peers aren’t going to believe me.
Trust me – I was a skeptic as well. But, the data speaks for itself.
In our work, we analyze every potential indicator of a student’s likelihood to enroll at a given institution. For each partner, we evaluate literally hundreds of potential markers to find the most predictive indicators of future enrollment.
The amount of a student’s financial aid is not the number one indicator.
It’s never been in an institution’s top five markers. Or their top ten. Or their top twenty-five. Not even their top fifty. In many cases, it’s not even predictive at all.
If you’re reacting with some version of, “no way” – you’re not alone. That was my initial reaction, too. How is it possible that something we spend so much time on each year isn’t one of the best predictors of enrollment?
There’s a few reasons. But before I explain why, let me be sure to say: the financial aid package is important – it matters in a student’s decision. But the dollar amounts offered just aren’t predictive.
1 – We know that FAFSA submission is important, and so we drive students to do so, even if they are not seriously considering attending our institution. In this effort, we get a heavy lift from school counselors, parents, and society at large. Many of our aid packages are going to students who have already decided not to attend.
2 – The amount of scholarship is just one part of the cost equation for a student. The family’s ability to pay matters. The same financial aid award to a student whose family has an AGI of $75,000 will land very differently than a student whose family has an AGI of $150,000. Different still for a student whose divorced parents registered an AGI of $75,000, but the non-custodial parent has significant resources to provide.
3 – There’s no way to accurately measure willingness to pay. Even when we measure the relationship between EFC and net cost, we can never truly know how much a family would be willing to pay at our institution. Sure, we could ask them, but as I discussed last week, families are wise to the game.
Here is what matters more:
How the student reacts to the financial aid package.
No matter what amount is printed on the financial aid package, the actions a student takes (or doesn’t take) next is much more predictive. A student who stops engaging with email and web content, or even cancels their scheduled visit is telling you much more clearly than any question on your financial aid appeal form that your offer wasn’t enough.
Meanwhile, a student who schedules a campus visit after getting your aid package is telling you that it is.
All throughout the recruitment cycle, students are sending signals small and large about their intent to enroll. We’ve tuned our admissions operations to the large signals – and then built processes to increase those numbers, thereby making them less reliable.
The amount of financial aid offered is important. But it’s not a signal from the student, and it’s not even in the top 50 markers you should be tracking to project enrollment.