2014 RISING SENIORS PERCEPTIONS OF FINANCIAL AID

Transcription

1 2014 RISING SENIORS PERCEPTIONS OF FINANCIAL AID RUFFALOCODY ENROLLMENT MANAGEMENT DR. RAQUEL BERMEJO, DIRECTOR OF RESEARCH TM 65 Kirkwood North Road SW Cedar Rapids, IA

2 TABLE OF CONTENTS INTRODUCTION 2 SURVEY RESULTS 3 PLANNING FOR COLLEGE 3 Family Discussion of College Finances 3 College Savings 3 Financial Difficulty 4 What Do You Think? Sticker Price 4 Importance of Financial Aid in College Search 4 INFORMATION ON FINANCIAL AID 5 Research on Financial Aid 5 Sources of Information on Financial Aid 5 Net Price Calculator 6 EXPECTATIONS 6 Merit Aid 6 Need-Based Aid 7 Aid Offer 7 FAFSA 7 Work 8 College Borrowing 8 ATHLETIC AID 9 PUTTING RESEARCH INTO PRACTICE: RUFFALOCODY S RECOMMENDATIONS 10 PLANNING FOR COLLEGE 10 INFORMATION ON FINANCIAL AID 10 EXPECTATIONS 10 ATHLETIC AID 11 METHODOLOGY 12 END NOTES RISING SENIORS PERCEPTIONS OF FINANCIAL AID 1

3 INTRODUCTION RuffaloCODY has surveyed students annually for the last five years regarding what they think about the recruitment communications they receive from colleges and universities. With this intelligence institutions can better understand the student perspective of the process and adapt in order to best inform students and their families. With the addition of Scannell & Kurz to the RuffaloCODY team, we ve discussed the importance of understanding not only how students are selecting a college based upon recruitment communications, but also how their perceptions of cost and the aid process influence that selection. How important is financial aid in their college selection process? How are they learning about it? Do they rule out institutions based on sticker price? What do they understand of the aid process? How much financial aid discussion is taking place at home? Shifting demographics, rising college costs, and increasing attention to how families will pay for college combine to make these questions more important than ever. With an understanding of how families would currently answer them, institutions can more effectively communicate the information needed by their prospective students and their families Rising Seniors Perceptions of Financial Aid is the first in an annual series that examines how college-bound seniors and their families view a variety of critical topics related to financing higher education. A nationally-representative sample of more than 1,500 college-bound high school seniors were asked about their families college planning, knowledge of college costs, understanding of financial aid, and expectations regarding financial aid they might receive. This report contains a summary of survey results followed by what we at RuffaloCODY and Scannell & Kurz consider key take-aways and action items RISING SENIORS PERCEPTIONS OF FINANCIAL AID 2

4 SURVEY RESULTS PLANNING FOR COLLEGE Family Discussion of College Finances Nearly 60% of respondents indicated their parents had discussed college finances with them. Caucasian and African-American students seemed more likely to have discussed finances with their parents than Hispanic and Asian students did. Of the students reporting their parents as very involved in their college selection process, 67% were also more likely to have discussed college finances with them. Only 38% of the students who reported their parents as not involved at all had already discussed college finances with their parents. College Savings HAVE YOUR PARENTS SAVED SPECIFICALLY FOR YOUR COLLEGE EXPENSES? YES 52% NO 34% I DON T KNOW YET 14% Nearly 80% of students who reported having done a lot of research on financial aid had discussed college finances with their parents, while of those who had not yet done any research on financial aid, just 42% reported to have had such a discussion. Students who had used a net price calculator in their research seem more likely to have discussed college finances with their parents (61%) than those who had not used one (52%). Students perception of how difficult they believe it will be to pay for their college education seems to affect some of their college search behaviors heading into their senior year and as they continue their financial aid research. A discussion of financing with their parents may in turn affect their perceived level of difficulty in financing their education. For example, 12% of students who discussed college finances with their parents perceived paying for college would not be difficult, compared to only 6% of those who had not discussed college finances with their parents. Conversely, just 22% of students who had already discussed college finances with their parents perceived that paying for college would be quite difficult, compared to more than 30% of those who had not had that discussion. Over half of the respondents knew their parents had saved money specifically for their college expenses; 34% indicated their parents had not, and 14% did not know whether their parents had saved for college. Caucasian and Asian students were more likely to respond that their parents had saved money for their college expenses, while Hispanic students (nearly twice as many as Caucasian students) were the most likely to respond that their parents had not saved money for this specific purpose. Family savings for college seems related to the amount of research students may have done on financial aid. Nearly 65% of students who reported to have done a lot of research on financial aid knew that their parents had saved money for their college expenses, while only 46% of students who had not yet done research on aid reported that their parents had saved money for this purpose RISING SENIORS PERCEPTIONS OF FINANCIAL AID 3

5 Financial Difficulty PERCEIVED FINANCING DIFFICULTY SOMEWHAT DIFFICULT 64% QUITE DIFFICULT 24% NOT DIFFICULT 12% Just 12% of respondents felt paying for college would not be difficult, while over 64% reported it would be somewhat difficult, and almost a quarter thought it would be quite difficult. Ethnicity seems related to perceived financing difficulty, with Caucasian students the least likely to report that paying for college would be quite difficult and Hispanic students almost twice as likely to report the same. Academic ability seems related to perceived financial difficulty, with high academic ability i students twice as likely as average academic ability ii students to report that paying for college would not be difficult. Forty-five percent of respondents reported they had not yet ruled any colleges out based on sticker price iii (note that the term was defined for them during the survey), while 40% indicated they had in fact already ruled out colleges based on sticker price alone. African-American students were more likely to have not ruled out schools based on sticker price, while Hispanic and Caucasian students were more likely to have done so. Parental involvement in the college selection process seems strongly related to this, with students who report very involved parents more likely to not yet have ruled schools out based on sticker price, relative to students who report less involved parents. Importance of Financial Aid in College Search HOW IMPORTANT IS FINANCIAL AID IN YOUR COLLEGE SEARCH? QUITE IMPORTANT 75% SOMEWHAT IMPORTANT 21% NOT IMPORTANT 4% What Do You Think? Sticker Price HAVE YOU RULED OUT OR WILL YOU RULE OUT ANY COLLEGES BASED ON THEIR STICKER PRICE? NO 45% YES 40% I DON T KNOW YET 15% Three-quarters of respondents felt financial aid was quite important in their college search, 21% considered it somewhat important, and only 4% considered it not important. African-American and Hispanic students were more likely to report financial aid as being quite important, followed by Asian students. Caucasian students were more likely to report financial aid as being not important relative to other ethnicities RISING SENIORS PERCEPTIONS OF FINANCIAL AID 4

6 Students who felt financial aid was quite important in their college search were more likely to plan on applying to more schools than students who considered financial aid less important. For example, financial aid was not important to 8% of students who planned to apply to only one school, compared to just 2% of students who planned to apply to ten or more schools. The converse was also true, with 80% of students who planned to apply to ten or more schools reporting that financial aid was quite important, and only 70% of students who planned to apply to two to five schools reporting the same. INFORMATION ON FINANCIAL AID Research on Financial Aid more likely to report having done a lot of research on this topic. Students who reported having done no research on financial aid were more likely to have already ruled schools out based on sticker price alone, while students who reported having done a lot of research were less likely to have done so. Sources of Information on Financial Aid COLLEGE WEBSITES 40% HIGH SCHOOL COUNSELOR 33% PUBLIC INFORMATION WEBSITES 9% PARENTS, FRIENDS, AND/OR RELATIVES 8% HOW MUCH RESEARCH HAVE YOU DONE ON COLLEGE FINANCIAL AID SO FAR? NOT A LOT 53% NONE 28% A LOT 19% FEDERAL INFORMATION WEBSITES 3% PRIVATE COLLEGE COUNSELOR 2% COLLEGE BOARD 1% CAMPUS VISITS AND TOURS 1% COLLEGE FAIRS 1% COLLEGE ADMISSION OFFICES 0.31% Over half of the respondents indicated they had done not a lot of research on financial aid by June of 2013 (at this point in time they were rising seniors.) Only 19% had done a lot of research, and 28% had not yet done any research. African-American students were more likely to have done a lot of research, while Asian students were more likely to have not yet done any financial aid research. Academic ability seems related to the amount of research a student is likely to have done on financial aid, with average academic ability students more likely to have done no research and high academic ability students When students who had already started their research on financial aid were asked their top source of information for it, 40% chose college websites followed by their high school counselor; public information websites; and parents, friends, and/or relatives. African-American students were less likely to have used public information websites and they were the most likely to have used college websites to conduct their research. Hispanic students were more likely to report their high school counselor as their top source of financial aid information RISING SENIORS PERCEPTIONS OF FINANCIAL AID 5

7 The level of parental involvement in their college search seems strongly related to the sources of information students are using to research financial aid. Nearly 45% of students who reported very involved parents indicated that college websites were their top source, followed by their high school counselor, and then parents, friends, and/or relatives. However, students whose parents were not involved in their college search chose their high school counselor as their top source for financial aid information, followed by college websites, and then public information websites. Students whose parents did not graduate from college utilize their high school counselor s help more than those whose parents both graduated from a four-year college, while students whose parents graduated from college tend to more often utilize college websites for information on financial aid. Nearly half of students for whom both parents graduated from a four-year college reported using college websites for aid information, while only 33% of students for whom neither parent graduated from college reported the same. Almost 40% of students whose parents had not graduated from college indicated their high school counselor is their primary source of information on financial aid, relative to only 27% of students whose parents were both four-year college graduates. Net Price Calculator Nearly three-quarters of respondents had already used (or were planning to use) a net price calculator iv from a college website to get an idea of the amount of financial aid for which they might be eligible (note that this term was defined for students during the survey.) Parental involvement in the college process seems to be strongly related to a student s use of a net price calculator: over three-quarters of students with very involved parents reported using one. Only 66% of those whose parents are not involved reported the same. Student use of a net price calculator also seems related to their likelihood of having already ruled out schools based on sticker price alone. Students who had used a net price calculator were more likely not to have ruled out schools based just on the sticker price than those who had not used a net price calculator. EXPECTATIONS Merit Aid DO YOU THINK YOU WILL QUALIFY FOR A MERIT SCHOLARSHIP BASED ON YOUR TEST SCORES OR HIGH SCHOOL GPA? YES 67% I DON T KNOW 21% NO 12% When asked if they thought they would qualify for merit aid, 67% indicated yes, 12% did not expect to qualify, and 21% did not yet know. Level of parental involvement in the process seems strongly related to how students responded to this question. Students with very involved parents were more likely to think they would qualify for merit aid than students with less involved or not involved parents. The amount of research the student had done on aid also seems to relate to their expectation of merit aid eligibility, with students who had done a lot of research more likely to think they would qualify for merit aid than those who had only done some research or who had not started their research at all. Students who had used a net price calculator were also more likely to expect to qualify for merit aid than those who had not yet used one RISING SENIORS PERCEPTIONS OF FINANCIAL AID 6

8 Need-Based When asked if they thought they would qualify for need-based aid, only 43% of respondents expected to qualify. Twenty-seven percent thought they would not, and 30% did not yet know. Hispanic and African-American students were more likely than other ethnicities to think they would qualify for need-based aid, while Caucasian and Asian students were more likely to think they would not qualify for this type of institutional aid. DO YOU THINK YOU WILL QUALIFY FOR NEED-BASED AID? YES 43% I DON T KNOW 30% NO 27% WHEN DO YOU EXPECT TO RECEIVE A FINANCIAL AID OFFER FROM A COLLEGE? Twenty-seven percent thought they would receive an aid offer at the time of admission, 21% expect to receive an offer after filing a FAFSA, and 26% did not know when an aid offer would be made. FAFSA AT THE SAME TIME I AM OFFERED ADMISSION 27% I DON T KNOW WHEN THAT HAPPENS 26% BEFORE I APPLY TO A SCHOOL 26% AFTER I FILE A FAFSA 21% DO YOU EXPECT TO FILE A FAFSA? The level of parental involvement in their college search seems related to the students perceptions of their eligibility: students with parents not involved at all were more likely to think they will qualify for need-based aid than students with very or somewhat involved parents. Students who have done a lot of research on aid were more likely to think they would qualify for need-based aid than those who had not yet done any research. They were also less likely to respond I don t know if I will qualify for need-based aid. Aid Offer When asked when they thought they would receive a financial aid offer from a college, more than a quarter of respondents expected to receive one before they even applied to a school. YES 75% I DON T KNOW 14% NO 11% Three quarters of respondents planned to file a FAFSA, while 11% did not. Only 14% did not yet know if they would file the form. Hispanic and African-American students were more likely to report that they would file a FAFSA. High ability students were more likely to intend to file a FAFSA relative to average ability students RISING SENIORS PERCEPTIONS OF FINANCIAL AID 7

9 WORK DO YOU THINK YOU WILL WORK WHILE YOU ARE IN COLLEGE? BETWEEN 11 AND 20 HOURS A WEEK 32% MORE THAN 20 HOURS A WEEK 28% BETWEEN 6 AND 10 HOURS A WEEK 17% I DON T THINK I WILL WORK 10% I WILL WORK DURING THE SUMMERS 9% LESS THAN 5 HOURS A WEEK 4% When asked if they thought they would work while in college and how many hours they expected to do so, more than 80% of respondents expected to work during the school year. Nine percent expected to work during the summers. Half the respondents expected to work somewhere between six and twenty hours per week. Students for whom both parents had graduated from a four-year college were more likely to plan not to work while in college. For students who reported at least one parent had graduated from a four-year college, they were more likely to plan to work between eleven and twenty hours a week while in college. Students whose parents had not graduated from college were more likely to plan to work more than twenty hours a week while in college. When asked if they expected to borrow money to help pay for their undergraduate degree, nearly half responded that they did. Only 9% did not plan to borrow, and 43% did not yet know their plans. Caucasian students were more likely to expect to borrow than were Hispanic, African-American, and Asian students. Over half of students with parents very involved in their college selection process planned to borrow to pay for their undergraduate degree, while only 40% of those with parents not involved at all reported the same. Students whose parents had already discussed college financing with them were more likely to plan on borrowing (52%) compared to those whose parents had not yet discussed college financing with them (44%). LESS THAN $31,000 57% BETWEEN $31,000 AND $40,000 35% MORE THAN $40,000 8% COLLEGE BORROWING ARE YOU GOING TO BORROW FOR YOUR UNDERGRADUATE DEGREE? PLANNING TO BORROW 48% I DON T KNOW 43% NOT PLANNING TO BORROW 9% Fifty-seven percent of students who expected to borrow planned to borrow less than $31,000; while 35% expected to borrow between $31,000 and $40,000; and only 8% planned to borrow more than $40,000. Caucasian students were more likely to expect to borrow between $31,000 and $40,000, while African-American students were more likely to plan to borrow less than $31,000. Students with parents very involved in their college search were more likely to plan to borrow less than 2014 RISING SENIORS PERCEPTIONS OF FINANCIAL AID 8

10 $31,000. Students whose parents were not involved at all were more likely to expect to borrow between $31,000 and $40,000. As might be expected, students who perceive paying for college will be quite difficult were more likely to expect to borrow more than $31,000. On the other hand, students who perceived that paying for college would not be difficult were more likely to plan to borrow less than $31,000. ATHLETIC AID DO YOU THINK YOU WILL RECEIVE AN ATHLETIC SCHOLARSHIP? YES 47% NO 31% I DON T KNOW 22% Relative to other ethnicities, African-American students were more likely to think they would be eligible for athletic aid. Students with parents very involved in their college search were more likely (64%) to think they would qualify for athletic scholarships than those whose parents were somewhat involved (54%) or those whose parents were not involved at all in their college search (48%). Of the respondents who are interested in participating in intercollegiate sports, their eligibility for athletic-based aid will be influential for almost three-quarters of them in deciding where to attend college. Thirty-two percent indicated this will influence their decision very much, and another 41% reported it will be an influence. Just less than one in five indicated it would slightly influence the decision on where to attend. INFLUENCE OF ATHLETIC AID IN DECISION ON WHERE TO ATTEND IT WILL INFLUENCE MY DECISION 41% VERY MUCH 32% SLIGHTLY 19% NOT VERY MUCH 8% Nearly half of the respondents planned to participate in intercollegiate sports. Forty-seven percent of those who planned to participate thought they would receive an athletic scholarship, 31% did not believe they would, and 22% did not yet know RISING SENIORS PERCEPTIONS OF FINANCIAL AID 9

11 PUTTING RESEARCH INTO PRACTICE: RUFFALOCODY S RECOMMENDATIONS PLANNING FOR COLLEGE Seek ways to encourage the family conversation about cost and aid, and provide the resources families need in order to direct that discussion. While students can stealthily learn about your institution from your website and other sources (without having to officially inquire), cost and aid may require more in-depth explanations and information in order to most accurately educate students. Consider how that information currently appears in materials and on your website and how it can be enhanced. Make sure it s easy for students and parents to find your net price calculator. Provide prominent links on both your admissions and financial aid pages. Provide case studies in your publications and on your website of how financial aid reduces your sticker price. Also, show a distribution of family incomes with aid received at each income level. INFORMATION ON FINANCIAL AID Don t forget high school counselors in your communications on financial aid. They are an important source of information on your affordability. Counselors may be the most important source of information for lower income or first-generation students. For local institutions and key feeder schools, consider offering financial aid information nights to educate families on the aid process in general, and/or events specific to families with an interest in your institution. You cannot overstate or over-communicate your early affordability messages. It s imperative that net price is communicated early and often given that 40% of rising seniors are ruling out colleges based on an expanded definition of sticker price (eg COA). Don t underestimate the importance of your college s website regarding communicating financial aid information and especially your net price calculator. Both are significant sources of information for prospective student and parents. EXPECTATIONS Make it easy for students to see how much merit aid they will qualify for. Encourage communication between families and the financial aid office early on. For larger campus events like Open House, find ways to make the aid discussion accessible from general aid information sessions to open financial aid office hours for more specific or personal questions. When students schedule campus tours and admissions interviews, consider offering the opportunity for a financial aid appointment to discuss your aid process and answer family questions. Communicate to students (and parents) your notification process for merit and need-based aid so they know when to expect to hear from you. Try to send merit award notifications along with your admit letters, followed later by need-based notification, if the student qualifies. And include the merit award in the need-based award letter. First generation students may be planning on working more than they should to meet college costs. This should be monitored and managed to ensure they can succeed academically. With 25% expecting a financial aid offer before they apply, it will be important to be crisp and clear about your financial aid timeline for merit and need-based awards RISING SENIORS PERCEPTIONS OF FINANCIAL AID 10

12 Explaining indebtedness and repayment options also have to be carefully crafted and explained as the current expectations probably don t realistically consider how much will need to be borrowed. ATHLETIC AID Make sure there s good communication and coordination among the athletic department, admissions, and financial aid on awards being offered to students RISING SENIORS PERCEPTIONS OF FINANCIAL AID 11

13 METHODOLOGY This study is based on the RuffaloCODY and Scannell & Kurz survey, 2014 Rising Seniors Perceptions on Financial Aid, which obtained interviews with a nationally representative sample of 1,556 teens who will graduate from high school in 2014 (with a population of 15,000 and a response rate of 10%). The surveys were conducted by RuffaloCODY via telephone and . The sample demographic breakdown is shown in Figure 1. Figure 1: Sample Demographic Breakdown MIDWEST 20% NORTHEAST 18% SOUTH 43% WEST 19% HIGH ACADEMIC ABILITY 56% AVERAGE ACADEMIC ABILITY 44% FEMALE 46% MALE 54% ASIAN 17% AFRICAN-AMERICAN 27% HISPANIC 26% CAUCASIAN 30% Statistical significance was reached at a 95% confidence level for the overall survey, as well as for gender, geographical location, academic ability grouping (high vs. average), and ethnicity. As a national survey, this study is not meant to replace research that is unique to your institution, your specific recruiting needs, or the students in your region. We provide our research results as a service to the admissions community. Based on our own enrollment experience and insight from enrollment management professionals all over the country, we ve developed highly sophisticated admissions and financial aid services that span the Admissions Stream from search through retention. If you re interested in a truly strategic approach to your enrollment management efforts, contact us to learn more RISING SENIORS PERCEPTIONS OF FINANCIAL AID 12

14 END NOTES i High ability students are defined for this research as students with a GPA of 3.5 or higher. ii Average ability students are defined for this research as students with a GPA between 2.5 and 3.4. iii Sticker price includes direct charges (tuition and fees, room, and board) and indirect costs (books and supplies, transportation, and personal expenses). iv The Net Price Calculator is a tool that students can use to estimate their net price to attend a particular college or university. Net price is the difference between the sticker price full cost to attend a specific college, minus any grants and scholarships for which students may be eligible RISING SENIORS PERCEPTIONS OF FINANCIAL AID 13