Four Ways Your Institution Can Minimize Enrollment Crisis Losses

The primary factor driving the higher education enrollment crisis isn't the widely-discussed "demographic crisis"—the shrinking population of 18- to 25-year-olds. By and large, financial uncertainty is the biggest barrier to enrollment and retention in the sector. It’s vital that institutions remove any and every obstacle between themselves and prospective students in order to maximize recruitment efforts. Addressing financial uncertainty should be chief among those efforts, and institutions can begin taking steps to do so now, provided they fully utilize the tools available to them.

Enrollment

Communication Tailored to Each Student
To begin with, let's talk about enrollment itself. The first step toward resolving financial uncertainty is for higher education institutions to provide clear and individualized communication to prospective students and their families regarding their financial responsibilities and options. Often, this documentation is so comprehensive that prospects must wade through an overwhelming sea of paperwork just to find any that's relevant to their own academic journey. Some prospects simply give up at this point—Harvard's Strategic Data Project shows that anywhere from 10 to 40% of "college-intending students" fall victim to summer melt. Overwhelming and often irrelevant financial aid documentation plays a role in that.

Modern higher ed tech solutions such as CRM platforms can produce targeted, personalized messaging to each prospect and offer them the full picture of their postsecondary education costs, as well as a list of financial aid and scholarship options available to them. This is crucial information for institutions to include, since summer melt disproportionately affects low-income students. Today's solutions can even guide prospects through the financial aid application process step by step, ensuring they don't borrow too much or too little; and give them realistic expectations about job opportunities and salaries awaiting them at the end of their academic path.

Everything a prospective student learns about the financial aspect of higher ed is known as financial literacy, and the more financially literate a student is, the easier their path from application to completion. However, a study published in Journal of Financial Aid found that "U.S. institutions compose student financial aid application instructions above the 13th-grade reading level, far surpassing the reading comprehension levels of over half of U.S. high school graduates," although the reading level of financial aid application instructions did vary by institution type.

Efficient Financial Aid Processing
Once a prospect has wrapped their head around the financial commitment, they're making to a higher ed institution, and have successfully applied for financial aid, the next step to keep them interested is to process their paperwork in as timely a fashion as possible. An EMI Research Solutions study conducted in February 2022 found that 16% of students who had been accepted to their first-choice school would consider enrolling somewhere else within two weeks of waiting for their first-choice to process their financial aid forms. 80% would consider it within two months. According to the same study, the percentage of students who actually did enroll at other institutions within these same time periods is only slightly lower. When an institution uses inefficient financial aid processing, it hemorrhages potential students.

This is another opportunity for institutions to utilize their tech solutions and CRM platforms, which can automate time-consuming manual processes in the financial aid office, including such pain points as matching ISIR codes to a student's FAFSA form. Meanwhile, other tech solutions can offer consistent, tailored communication to students before, during, and after enrollment. Speedy financial aid processing and frequent correspondence will keep prospective students engaged and excited about their upcoming matriculation and prevent their eyes from wandering to other schools. In simpler terms? Efficient financial aid processing and communication stops the bleeding.

Retention

Early, Proactive Intervention
After enrollment comes retention—and, along with it, an entirely different set of potential pitfalls. Resolving financial uncertainty is as important to retention as it is to enrollment. According to a Gallup survey, 72% of college non-completers said that a frustrating, fragmented financial aid process hurt their academic performance and completion. Aside from implementing and deploying the aforementioned methods to boost enrollment, how can higher education institutions ensure that they keep as many students as possible on the track to completion?

Higher ed leaders and financial aid offices know that Satisfactory Academic Progress (SAP) is the minimum amount of academic progress a student needs to make to keep their financial aid. As a student proceeds through their academic journey, they may find themselves overwhelmed with homework assignments, their class load, working part- or full-time, internships, or any number of other factors. Keeping track of their financial and academic obligations is an invaluable tool to foster success. Higher education software platforms can show each student all their obligations so they can see what’s going well and what needs work. Students can log in and see when financial aid payments or forms are due, how their GPA stands against what’s required of them, and more. And if the student doesn’t know how to ask for help? AI-powered advising platforms can point them in the right direction.

Even better, higher ed tech solutions can identify—and help staff and faculty intervene with—at-risk students earlier, more rapidly and in a more proactive way than ever before. In the past, students slipped through the cracks before faculty or other staff could help. Now, dynamic data analytics can use metrics like grades and attendance to monitor and track patterns in student performance and ensure that every appropriate party can be notified of concerning trends. Faculty, advisors, or financial aid staff may realize students need help even before the student does, so they can meet with the student and provide assistance to keep them on track financially and academically. By utilizing solutions that automate repetitive tasks, institutions report an average 80% increase in staff efficiency. Fewer papers to process and lowered call volumes mean your team frees up time to help students stay enrolled and on track to achieving their goals.

Expedited Financial Aid Verification
Financial aid verification is flagging fewer students for review than in the past. Even still, a report by National College Attainment Network and the National Association of Student Financial Aid Administrators revealed that in the first three quarters of the 2021-22 FAFSA filing cycle, more than 2.2 million students, or roughly 17% of financial aid applicants, were selected for verification. Additionally, the number of Pell Grant-eligible students flagged for verification remains higher than other demographics. Unfortunately, a disproportionately large amount of those students come from low-income families. In other words, the students who need financial aid the most are also being flagged for verification the most frequently. The verification process is, historically, both prolonged and painstaking. While few students are afraid of putting in a little hard work, this directly affects retention: The Houston Education Research Consortium (HERC) discovered in 2020 that students selected for FAFSA verification increased the likelihood of summer melt between five and six percent. The HERC paper also acknowledged that racial and ethnic minorities were also disproportionately flagged for verification.

Verification is another example of where automated financial aid tasks can save the day. Higher ed leaders will be glad to hear that tech solutions can save a school's financial aid office time and money, whether those offices handle verification themselves or outsource to a third party. Likewise, returning students will be happy to know that their institution uses a software platform that can take them through verification every step of the way and put their worries to rest in a matter of days, not weeks. Sure, this will improve the student's attitude about returning to school, but in case their verification fails to go through or requires more work on their part, a fast-acting verification process gives them more time before the next semester to iron out SAP appeals or to provide additional paperwork and information to the responsible parties.

Conclusion

In the higher education sector, "demographic crisis" is the word of the day—and yes, it's inevitable. However, even though institutions can't actually raise the number of people entering the 18-to-25 age bracket, they can still do the next best thing and mitigate whatever damage is coming. They can boost enrollment by offering clear communication and efficient financial aid processing for prospective students and they can optimize retention by offering early, proactive intervention and ease the financial aid verification process for returning students. This issue was raised in the 2024 EDUCAUSE Top 10 list of IT issues, trends and technologies, and as a mission partner with EDUCAUSE, Ellucian is proud to offer actionable solutions. Click here for more information on how your institution can eliminate financial uncertainty and boost both enrollment and retention.