The 2010 Student Poll published by the College Board and Art & Science Group, LLC confirms that most college applicants are dismissing colleges from their list on the basis of sticker price, without considering net price.
The study also finds that applicants are nonetheless willing to attend a higher-priced school for:
- Strong academics in field of interest
- A place where they can fit in and feel comfortable
- Prestigious academic reputation
- Excellent record of career placement after graduation
- Active, vibrant social life
W. Kent Barnds, vice president of enrollment and communication at Augustana College and Robert Massa, vice president for communications at Lafayette College, share their tips for smaller, liberal arts institutions on how to approach the conversation about net price and financial aid with applicants.
No Silver Bullet
There are standard ways to help educate the public about the sticker price/net price difference:
- A public presentation for the university president to do with the city council, the rotary club, other influencer groups, to debunk myths about college costs
- Regular visits to lower-income high schools (where potential applicants may not have the same access to a college counselor and may be first-generation and unaware of how financial aid works)
- The net price calculator
But Barnds and Massa warn that these methods do not address the real issue, and they share concern that polls and media (as well as federal) attention to the problem of communicating net price to the public actually focuses attention on a "red herring."
"Providing a net price calculator is not enough," Massa warns. "Because you will package students differently, there may be so many packaging options that would change the cost to families -- and a student's total college expense is affected also by personal and idiosyncratic choices." And once you have a net price calculated, that still does not take into account critical factors such as your institution's average time to complete a degree. A lower net price at an institution where degree completion frequently takes 6 years may not be a better bargain than a higher net price at an institution where degree completion typically takes only 4 years.
The Risk in Discussing Net Price Too Much
Focusing attention on net price can also raise a false expectation for applicants that their college costs will be covered by a merit scholarship. "Colleges have done damage to themselves," Barnds warns, "by so aggressively marketing their merit-based scholarships that this has created an impression that everyone is going to get a scholarship." Massa adds, "The simple fact of the matter is that we do need some people to pay the full sticker price. Otherwise we can't afford to help the people who can't."
What to Share About Financial Aid
"Be as transparent as you can be about what it costs for others to attend your institution."
W. Kent Barnds, Augustana College
This transparency will both help to garner more applications from those prospects who would otherwise eliminate your institution from the beginning based on sticker price, and will help you engage applicants in a candid discussion of college costs and financial aid options.
Late in the funnel, transparency means helping families understand the cost structure of your institution and how that affects price. Earlier in the funnel, Barnds and Massa both advocate communicating at least the spread of incomes and financial aid eligibility at your institution for a particular year. Many financial aid officers object to this approach on the basis that it may raise expectations and on the basis that it is not possible to give accurate, perfect information (a family with $100K income and no assets and a family with $100K income and $1 million in assets will have two different eligibilities). However, Massa notes, "The greater good is helping more students at the lower end of income. Offering ranges based on income will help more people than it will hurt by raising false expectations."
For example, you can bracket income. "Between $30K and $50K, here is the range of your financial aid award. Between $50K and $100K, here is the range. It's not perfect, but it helps people to see what their options are likely to be. We can't allow perfect to be the enemy of good in this regard." This approach gives applicants general guidelines that allow them to put themselves in a range, and helps them feel a little more confident that financing education at your institution is possible
In a similar approach, admissions officers at Augustana College have 3 laminated charts that they share with families during the personal interview:
- The Sallie Mae/Gallup poll showing that the majority of families pay most of college costs out of pocket, from income and savings
- A pie chart showing the types of financial assistance available to Augustana students
- The dollar range of the total award
"This is not perfect," Barnds advises, "and there is the risk that it may create a false expectation, but this also allows us to present an invitation to families by showing that private education can be affordable."
COMMUNICATING INSTITUTIONAL VALUE
Academic Impressions offers this on-demand, recorded session with W. Kent Barnds and Robert Massa for readers who want more information on a "how-to" approach to re-crafting institutional messages about costs, value, and tangible outcomes.
Provide Flexible Options
Massa suggests approaching this conversation with both caution and flexibility. "If a family has a high income and they feel that yours is the best college for them, they will pay," he notes. "It is for the 'near miss' family that this conversation is critical." Massa suggests keeping front and center the recognition that meeting the cost of education for many of the students who are not receiving needs-based aid will remain a challenge. Be ready to explore payment plan options, different financing options, and private loans. "Work with that family to develop the best financial plan for them."
"Ultimately, it is that family's decision whether they are getting value worth the price. Be candid about that in your written and verbal conversations with them, and families will appreciate that candor."
Robert Massa, Lafayette College
Direct Attention Where it Matters Most: The Value Proposition
Ultimately, however, price does not decide enrollment for 'near miss' families. Value does.
The Student Poll, Barnds notes, confirms that while many applicants are daunted by sticker price, most applicants state that they are willing to pay more for higher value -- that is, if you have the right program for them, they feel that they fit in at your institution, and they are sure that you will help connect them with their chosen career.
"The final decision is about the emotional investment with your institution. We had a full-tuition scholarship that was only yielding 4 out of 10 students it was offered to. We had taken cost out of the equation. That suggested there was a lot more factoring into that decision than cost."
W. Kent Barnds, Augustana College
The real issue, then, in raising yield is cultivating more of an emotional investment among your applicants and admits. "You have to get applicants to a stage where they are emotionally invested enough to make the financial stretch," Barnds suggests.
For articles from Academic Impressions offering practical strategies for communicating value and cultivating that emotional investment in your institution, read:
Boosting Yield at Private Colleges: Making the Case for Value
(February 25, 2010, with W. Kent Barnds & Robert Massa)
Marketing the Value of the Education You Offer
(January 7, 2010, with Bob Sevier)
Communicating Your Institution's Value in This Economy
(October 29, 2009, with Robert Massa)