Financial Aid and Retention: Using Data Analysis to Guide Effective Policy Decisions

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Financial Aid and Retention Using Data
Analysis to Guide Effective Policy Decisions

• Debra Johnson
• Financial Aid Director
• Carol Rowlett
• Institutional Research Manager
• Howard Ballentine
• Dean of Enrollment Management and Planning

Jefferson College of Health Sciences
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Understanding Financial Aid

• Types of financial aid
• Your institutions financial aid policies
• Your institutions data where it is stored and
  what the data means

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Objectives for this presentation

• Why should I try to analyze financial aid and
  retention?
• How can I begin to analyze financial aid and
  retention?
• How can local conditions affect such an analysis?

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Why do the analysis?

• Institutions that continually review their
  financial aid policies and adjust where necessary
  have higher retention rates
• (Finney and Kelly, 2004)

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Why do the analysis NOW?

• Financial aid turmoil!
• Higher Education Act Reauthorization
• Use limited resources wisely to increase
  retention and student success

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Changes in the Financial Aid Market

• Reauthorization (HEA)
• Post 9/11 GI Bill
• Fewer lenders
• Ensuring Continued Access to Student Loans Act
  (ECASLA)
• Changing loan conditions

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Higher Education Act Reauthorization

• New emphasis on accountability
• Financial aid reporting
• Financial accessibility of institutions
• Retention rates

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Financial Aid and Retention previous studies

• Retention issues are heavily related to student
  finances (Education Policy Institute, 2004)
• Students who have adequate funding are more
  likely to persist (Herzog, 2005)
• Students who are financially constrained are the
  most likely to drop out (Tinto, 1993)
• Financial aid policy only affects retention when
  it is at low cost to the student (Singell, 2001)

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Prior studies institutional aid

• Institutional grants increase retention
  (DesJardins et al, 2002)
• Effects of institutional aid on retention may be
  greater for students with higher incomes (Gross,
  2007)
• Merit-based institutional aid is more likely to
  go to students with low risk factors for
  attrition (Price and Davis, 2006)
• Institutional aid is only one of many factors
  affecting retention (Gross et al, 2007)

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Our story thus far

• Refining your financial aid policy can improve
  retention
• If you dont already have a financial aid
  analysis system, now is a good time to start
• Your financial aid policies really only affect
  specific types of aid
• Financial aid isnt everything affecting
  retention - dont lose track of the big picture

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Where to start?
NOTE This is THE MOST IMPORTANT SLIDE of the
presentation !

• Have clear goals in mind.
• Be sure that what you are doing fits with your
  institution.
• Context is everything. Dont forget to look at
  the big picture!

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Where to start?

• 1. Have a clear project goal in mind.

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• What is the mission of your institution?
• What is the mission of your financial aid office?
• Are you doing a one-time project, or setting up a
  system for recurring measurements?

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JCHS Mission Statement

• Jefferson College of Health Sciences prepares,
  within a scholarly environment, ethical,
  knowledgeable, competent, and caring healthcare
  professionals.

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JCHS Fin. Aid Mission

• The Office of Financial Aid supports the College
  mission by providing support for recruitment,
  retention, and student learning by supplying
  students and families with accurate information
  and exemplary service to obtain maximum financial
  resources.

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JCHS Project Goal

• Use data to
• make informed strategic decisions
• regarding institutional financial aid policy
• with a goal of increasing retention.

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Where to start?

• Know your institutions objectives.
• Make sure that your project goal fits with the
  overall plan for the institution.

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JCHS Background

• 4-year private college
• Enrollment 1,000
• Healthcare professions
• Vision National recognition

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JCHS Initiatives

• Expand enrollment
• Greater percentage of B.S., M.S. programs
• Students with higher academic qualifications
• Higher percentage of first-time freshmen
• Increased student engagement

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Where to start?

• Know what your institution looks like.
• This may affect what data you look at later on.

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JCHS - Demographics

• Subject to change across time!
• 400 new students for Fall 2008
• 40 Associate / 40 B.S. / 20 Masters
• 80 transfer
• 2/3 full-time
• 90 commute

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JCHS - Retention

• One-year retention 74
• Higher for Associate than for Bachelors
• Higher for transfers than for first-time students
• Recall that JCHS is shifting to more Bachelors
  students and more first-time students.

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Where to start?

• 4. What are your institutions current
  financial aid policies?

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JCHS Types of Institutional Financial Aid

• Merit-based aid used for recruitment
• Discretionary institutional financial aid,
  generally capped at direct cost of attendance
• Institutional work-study
• (Carilion tuition waiver)

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JCHS - Direct Cost of Attendance

• Tuition
• Room and board (residential students)
• Institutional financial aid may be applied to
  any of these costs remaining after the
  application of all other financial aid. Other
  costs may also be covered, at the discretion of
  the financial aid officer.

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Where to start?

• 5. Decide how to limit your data.

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JCHS - Data constraints

• Full-time undergraduate cohort
• Excluded programs with substantially different
  tuition
• One-year retention
• Data from 2003-2006

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Where to start?

• 6. What data should you look at?

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Financial Aid Measurements

• The wonderful thing about standards is that
  there are so many of them to choose from.
  Grace Murray Hopper

Remember the measurements you use should be
based on your own institution. This may take
significant trial and error!
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JCHS Data used

• Changes in average amounts over time
• Tuition
• Cost of attendance/direct cost of attendance
• Financial aid amounts, in total and by type
• Number and of students receiving aid
• Peer data (IPEDS)
• Amount of need
• Amount of family income
• Financial aid as a of cost of attendance

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JCHS Trends - Cost of Attendance

• Between 2003 and 2006
• JCHS cost of attendance increased by 77
• JCHS mean financial aid package increased by 52

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How does this compare?
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JCHS Financial Need

• 40 have 20,000 in need
• 3 receive 20,000 in financial aid
• Due to packaging to direct cost of attendance
• Mean need 14,565
• Mean financial aid 10,851

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JCHS Need and Retention

• Mean need of students retained for one year
  15,881
• Mean need of students not retained for one year
  11,036

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JCHS Aid Amounts and Retention

• Increased retention was positively correlated
  with
• increased total financial aid
• increased grant amounts
• increased loan amounts

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JCHS Total Financial Aid

• If you give them money, they will come
• Increased retention was positively correlated
  with increased total financial aid
• for students with need and
• students without need
• Stronger correlation for those with need

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JCHS Grants vs. Loans

• Retention was positively correlated with
  increased grants for higher incomes (
  40,000)
• Retention was positively correlated with
  decreased loans for middle incomes
  (20,000-39,999)

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JCHS Inst. Financial Aid

• No significant correlation between retention and
  work-study or tuition waiver
• 84 of admission award recipients were retained
  for at least one year
• 78 of other inst. fin. aid recipients were
  retained for at least one year
• Retention highest for institutional grants of
  about 4,000

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Where to start?

• 7. What are the implications of your findings?
  How might your findings benefit your institution?

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JCHS Policy Implications

• Costs of attendance have increased far greater
  than financial aid, making the college less
  affordable.
• Retention rates were positively correlated with
  increased institutional aid therefore
  increasing the total amount of institutional aid
  should increase retention

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JCHS Policy Implications

• However even though costs have increased
  substantially more than financial aid, retention
  rates have not decreased over time.

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Where to start?

• 8. How do your findings fit into the bigger
  picture for the institution?

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JCHS The Bigger Picture

• What else might affect retention?
• STUDENT ENGAGEMENT !
• Enhanced academic support services
• Improved residential facilities
• Wider variety of student activities

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JCHS The Bigger Picture

• Upon review of all the available data, JCHS
  administration decided that
• Current financial aid policies were meeting
  acceptable goals
• Available funding should be used for student
  engagement and improvements in infrastructure
• Financial aid policies should continue to be
  reviewed on a regular basis.

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Where to start?

• 9. What was accomplished?

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Accomplishments

• Did you accomplish your initial goals?
• Did you accomplish anything else worthwhile to
  the institution?

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JCHS IR Accomplishments

• Standards for assessment
• A continuing system for analysis
• Verification of the effectiveness of current
  financial aid policies

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JCHS Informing Administration

• The growing difference between total financial
  aid and costs of attendance
• Our institutional aid policies compared to those
  of peers
• Interactions between strategies in different
  areas of the college

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What should I remember if I try to do a project
like this?

• Have clear goals in mind.
• Be sure that what you are doing fits with your
  institution.
• Context is everything. Dont forget to look at
  the big picture!

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References

• DesJardins, S. L., Ahlburg, D. A., and McCall
  McCall, B. P. (2002). Simulating the longitudinal
  effects of changes in financial aid on student
  departure from college. Journal of Human
  Resources 37(3)653-679.
• Education Policy Institute. (2004). The Art of
  Student Retention A handbook for practitioners
  and administrators. Austin, TX.
• Finney, J. E., Kelly, P. J. (2004).
  Affordability Obtaining and making sense of
  information about how students, families, and
  states pay for higher education. Change, 36(4),
  54-59.
• Gross, J.P.K, Hossler, D., and Ziskin, M. (2007).
  Institutional aid and student persistence an
  analysis of the effects of institutional
  financial aid at public four-year institutions.
  NASFAA Journal of Student Financial Aid, 37(1),
  28-39.
• Price, D. V. and Davis, R. J. (2006).
  Institutional grants and baccalaureate degree
  attainment. Retrieved June 2, 2008 from NASFAA
  website http//www.nasfaa.org/Subhomes/ResearchHo
  me/InstitutionalGrantsandDegreeAttainment.Pdf
• Herzog, S. (2005). Measuring determinants of
  student return vs. dropout/stopout vs. transfer
  A first-to-second year analysis of new freshman.
  Research in Higher Education, 46(8), 883-928.
• Singell, L.D., Jr., (2001). Merit, need, and
  student self selection is there discretion in
• the packaging of aid at a large public
  university?. Economics of Education Review,
• Vol 21, 2002, 445-454.
• Tinto, V. (1993). Leaving College Rethinking the
  Causes and Cures of Student Attrition (2nd ed.),
  University of Chicago Press, Chicago, IL.