College Affordability 2014

© College Inroads, LLC. 2014, all rights reserved© GuidedPath, 2014, all rights reserved

The Reality of College Affordability:

2014 and beyond

Cyndy McDonald

Michael Davila

HECA Jan. 2012

Presenters

Cyndy McDonald Owner McDonald & Associates College Consulting

& GuidedPath/MyCCA.net 25 years of experience Nationally recognized as having expertise in this

area Does training at national/regional level

Michael Davila Owner/Director College Inroads attended US Naval Academy & taught there MS degree with emphasis on Strategic Enrollment

management from UT Austin

College Affordability

Open the mystery box of college funding for families

Help families make appropriate college choices, including college scholarships

Be proactive with families

Families of ANY means want to know how to best manage their resources for paying for college.

© GuidedPath, 2014 all rights reserved

Not a Cookie Cutter Process One size DOES NOT fit all people.

Families need to know how their family situation will fit into the financial aid process.


Gaining A Perspective

Education in the 21st Century

Why does College Cost so Much? Physical resources

Investment in “best” of everything on campus Deferred Maintenance Costs

Intellectual Assets High Costs of Star Faculty Salaries “Baumol’s Cost Disease”

Administration Staffing Number of administrators ballooning

Teaching loads reduced

Unprepared Students

Division I Sports

Competitiveness amongst Colleges…and consumers Market within Higher Ed

Many others

(c) College Inroads, LLC. 2014, all rights reserved

Cost of Attendance: College MSRP

The average public university costs:

$22,828 per year The average private university costs:

$44,757 per year The average elite private university costs:

$65,000 to $70,000 per year


And, college prices are trending up…up…and away…


Trends in Out of Pocket Costs 1999-2012


Exponential Increase

Enrollment management contributes to process

Merit scholarships offered, especially for ½ and Merit categories

Increases in merit awards has outpaced increases in need based awards


A Picture is worth a thousand words…

(C) 2009 College Inroads, All rights reserved

Strategic Enrollment

Management

What is Strategic Enrollment Management ? Definition: Enrollment Management is the strategic and selective

use of offers of financial aid to shape the incoming freshman class in furtherance of the institution’s goals. It is distinguished from the allocation of financial aid based on student needs or on academic merit.


What SEM does

Increase “net tuition revenue” streams Increase “full pays” Lower the discount rate Increase the enrollment yield

Increase the academic profile of entering freshman class

Increase diversity Increase retention

Can all of these be simultaneously achieved?


How to Enroll the Class You Want


What drives financial aid packaging? “A student’s willingness to pay is the most important factor in

determining the size of an aid package” Noel Levitz White Paper “Connecting Enrollment and Fiscal Management”

What is “willingness to pay” vs “ability to pay”?

Hint: Look at what the College Enrollment Managers look at! Table Analysis…


Quick Take

“Good luck getting any institution to tell you exactly how they handle ability to pay as a driver in their admit decision," said one enrollment manager who requested anonymity. "What they will say is 'We're need-blind.' That's bull(expletive deleted). They would never tell you exactly how they do it, but they do it all the time.”

Quirk, M. (2005, November ). The Best Class that Money Can Buy. Retrieved November 15, 2007, from http://www.theatlantic.com/doc/200511/financial-aid-leveraging/4



Where’s the $$$?

Where’s the Money?

In the last ten years, colleges have increased the number of scholarships they offer to students.

Of the private colleges/universities in the United States,

94% offer some merit scholarships. 100% of the public colleges/universities offer some sort of merit

scholarships. (NACAC, 2007)


College affordability picture Where do Merit $$$ come

from? From schools From high schools From outside sources

Use Net price calculators from college websites or College Navigator.

College Finance Pie

Federal Loans

College

Fed/State

Colleges

Private

Other


What can we do to lower our costs? Scholarships

Early College Start

CLEP

AP Tests

Pick the right college

Max out the GPA

Guaranteed Tuition Programs

Start at a community college

Move out of state and establish residency for out of state public colleges

Attend a “work college”

Demonstrated Student Interest

ROTC or Service Academies

Max out the SAT/ACT

Attend a less “visible” college

Appeals

Be the Shining Star!


What’s My Flavor

Tailoring college affordability to family needs

DOES THIS SOUND FAMILIAR?

Josie’s family: Dad is a teacher, mom shares a teaching position so she can

be home more with the kids. AGI is a $120,000. They have $50,000 in the bank, $100,000 in house equity, and a younger sibling just starting high school.

Derek’s family: Dad and mom are professionals, both bring home high salaries,

dad owns his own financial firm. They have an AGI of $375,000. They have extensive assets, and a lot of home equity. Their younger daughter is a sophomore in high school.


SOUND FAMILIAR? (CON’T)

Enrique’s family: Single parent mom, works as nurse’s aid at the local hospital; has 3

other children, no child support. AGI is $45,000. Enrique works too, earning about $3000 per year. Mom has no home equity or savings.


FAMILY FLAVORS

Financial Aid Whole

1/2 - 1/2

Merit

Merit

½ - ½

Whole

Josie EFC:

Derek EFC:

Enrique EFC:

1/2-1/2

Merit

Whole

$25,700

$180,000

$2600


MATCH AFFORDABILITY TO FAMILY SITUATION

Whole: Eligible for all grants/aid available. Should have substantial aid package with Pell Grants, university grants, & work study.

1/2 - 1/2 :Same out of pocket expense for attending public/private schools. At the public school family foots most of the bill. At the private school ½ paid by student, ½ paid by school.

Merit:Scholarships are fundamental to college financing- $ in the pocket. Only source of grants/scholarships

MERIT

½ - ½

WHOLE


Scholarship

Fallacy

Scholarship Fallacy Q: Why do families want a scholarship?

A: To replace family contribution

Real A: Scholarships are part of financial aid Scholarships DO NOT replace family contribution

Affordability strategy: Help families understand how scholarships are actually used in college financing. Using the 3 flavor strategy will help.


Finding your flavor1. Help families calculate

their Estimated Family Contribution

2. Use the EFC to calculate their family flavor

Use net aid calculators, FAFSA forecaster, www.finaid.org, college board, etc. to calculate EFC.

Category Approximate EFC

Whole $11,000 & less

½- ½ $11,100-$30,000

Merit (Skim) $45,000+

Check out the College Board list of colleges using their NPC:http://netpricecalculator.collegeboard.org/participating-schools


http://www.finaid.org/

http://netpricecalculator.collegeboard.org/participating-schools

Affordability Strategy: Whole Apply to colleges where the student’s academic profile

is in the top range Makes awards more gift rather than self-help heavy

Apply to colleges that have eliminated self help aid for low income students. These policies include: Reducing or eliminating parent contribution or parent/student loans Examples: Amherst, Bowdoin, Brown, Dartmouth, Stanford, Yale

List available at www.finaid.org

Apply to colleges who will fully or come close to fully funding financial need Use websites or databases for searching (College Navigator, collegedata.com,

other) Usually high need met ≠ high merit

Write letters of special circumstances to appeal financial aid offers as needed


http://www.finaid.org/

Affordability Strategy: ½ -1/2

Compare Financial Aid AwardsMerit or need based scholarships may replace:

Student loans/workStudent scholarships- offered by the college

Parent loansCheck college policies

Write letters of special circumstances to appeal financial aid offers as needed

Use “1st choice” strategy


Affordability Strategy:

Help families find Merit Scholarships Find schools that offer merit awards through meritaid.com,

collegetreasure.com, mycca.net, other resources

Match academic profile to school profile

View academic profiles in Wintergreen Orchard House, Common Data Set, College Navigator, College Board, other

Develop outstanding quality to bring to college:

Athletics

Recognition

Performing Arts

Feel Free to Contact Us:

Cyndy McDonald: [email protected]

Michael Davila: [email protected]

mailto:[email protected]

mailto:[email protected]

College Affordability 2014

Education

college scholarships

college msrp

college websites

work college

community college

college prices

college navigator

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