2015 Research Report RISING SENIORS PERCEPTIONS OF FINANCIAL AID

SM 2015 Research Report RISING SENIORS PERCEPTIONS OF FINANCIAL AID An analysis of how college-bound seniors and their families view a variety of topics related to financing higher education This national report analyzes survey responses of more than 1,500 high school seniors, gauging their perceptions and expectations in terms of paying for college and applying for financial aid. Family discussion of and planning for college expenses Perceptions of the financial aid process Sources of information in researching cost and aid Expectations for merit-, athletic-, and need-based aid, work, and loans Raquel Bermejo, Ed.D., Director of Market Research In conjuction with: A DIVISION OF Ruffalo Noel Levitz For additional research reports and findings, www.ruffalocody.com/em 2015 Ruffalo Noel Levitz 2015 Rising Seniors Perceptions of Financial Aid 1

TABLE OF CONTENTS Introduction Survey Results Planning for college 3 4 4 Family discussion of college finances 4 College savings 4 Financial difficulty 5 What do you think? Sticker price 5 Importance of financial aid in college search 6 Information on financial aid 6 Research on financial aid 6 Sources of information on financial aid 7 Net price calculator 7 Expectations 8 Merit aid 8 Need-based aid 8 Aid offer 9 FAFSA 9 Work 10 College borrowing 10 Athletic Aid Methodology About Ruffalo Noel Levitz End notes 11 13 13 14 2015 Ruffalo Noel Levitz 2015 Rising Seniors Perceptions of Financial Aid 2

Introduction Annually for the last six years, we have surveyed high school students regarding what they think about the recruitment communications they receive from colleges and universities. With this intelligence institutions can better understand and adapt to the student perspective of the process, thereby putting themselves in a position to best inform prospective students and their families. Particularly in recent years, it is critical to understand 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 institutions out 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 currently answer them, institutions can more effectively communicate the information needed by their prospective students and their families. 2015 Rising Seniors Perceptions of Financial Aid is the second in an annual series that examines how college-bound seniors and their families view a variety of critical topics related to financing higher education. In June 2014, a nationally-representative sample of more than 1,500 college-bound high school seniors were asked about their college planning, knowledge of college costs, understanding of financial aid, and expectations regarding aid they might receive. This report contains a summary of survey results in addition to what we at Ruffalo Noel Levitz and Scannell & Kurz consider key take-aways and action items. 2015 Ruffalo Noel Levitz 2015 Rising Seniors Perceptions of Financial Aid 3

Survey Results Planning for college Family discussion of college finances Overall a higher percentage of students reported their parents as being involved in their college search than a year ago, which in turn resulted in a higher percentage of respondents indicating that their families had already discussed college finances with them: 64% in 2015, up from 58% a year ago. Caucasian and African-American students seemed more likely to have discussed finances with their parents than did Hispanic and Asian students. Of the students reporting their parents as very involved in their college selection process, 72% 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. First-generation students seemed slightly more likely to have not yet started their research on financial aid and more likely to respond that their parents had not discussed college finances with them. More than 82% 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 46% 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 college 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, 15% of students who discussed college finances with their parents perceived paying for college would not be difficult, compared to only 10% of those who had not discussed college finances with their parents. Conversely, just 21% of students who had already discussed college finances with their parents perceived that paying for college would be quite difficult, compared to more than 27% of those who had not had that discussion. College savings Over half (57%) of the respondents knew their parents had saved money specifically for their college expenses, up from 52% a year ago; 30% indicated their parents had not (down from 34% a year ago), and 14% did not know whether their parents had saved for college (the Have your parents saved specifically same percentage as in 2014). for your college expenses? 57% 14% 30% Yes No I don t know yet 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 finacial aid. 2015 Ruffalo Noel Levitz 2015 Rising Seniors Perceptions of Financial Aid 4

Nearly 62% 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. Parental level of education seems strongly correlated with students responses to this question, with 63% of students whose parents had graduated from college responding that their parents had saved for their college education versus only 49% of first-generation students. Financial Difficulty Just 13% of respondents felt paying for college would not be difficult, while 62% reported it would be somewhat difficult (down from 64% a year ago), and a quarter thought it would be quite difficult. Perceived financing difficulty 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. 62% 25% 13% Somewhat difficult Quite difficult Not difficult High academic ability students were more likely than average academic ability students to report that paying for college would not be difficult. First generation students were more likely (32%) to respond that financing their college education would be quite difficult than were those whose parents had graduated from college (20%). What do you think? Sticker price Forty-six percent of respondents reported they had not yet ruled any colleges out based on sticker price (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. Have you ruled out or will you rule out any colleges based on their sticker price? 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. 46% 14% 40% Yes No I don t know yet 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. First-generation students were slightly more likely to have ruled out schools based on sticker price than were students whose parents had graduated from either a two- or a four-year college. 2015 Ruffalo Noel Levitz 2015 Rising Seniors Perceptions of Financial Aid 5

Importance of financial aid in college search How important is financial aid in your college search? Nearly three-quarters of respondents felt financial aid was quite important in their college search, 20% considered it somewhat important, and only 7% considered it not important. 73% 7% 20% Quite important Somewhat important 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. First-generation students were more likely (81%) to respond that financial aid is quite important than those whose parents graduated from college (67%). Key Recommendations g Seek ways to encourage the family conversation about cost and aid, and provide the resources families need in order to direct that discussion. g 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. g 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. g Provide case studies in your publications and on your website demonstrating how financial aid reduces your sticker price. Also, show a distribution of family incomes with aid received at each level. Information on financial aid Research on financial aid Over half of the respondents indicated they had done not a lot of research on financial aid as of June 2014 (at this point in time they were rising seniors.) One in five had done a lot of research (this was similar, at 21%, a year ago), and 24% had not yet done any research (down from 28% last year). How much research have you done on college financial aid so far? African-American students were more likely to have done a lot of research on aid, while Asian students were more likely to have not yet done any. 56% 24% 20% Not a lot None A lot 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. 2015 Ruffalo Noel Levitz 2015 Rising Seniors Perceptions of Financial Aid 6

Sources of information on financial aid Sources of information on financial aid College websites 52% High school counselor 36% Parents, friends, and/or relatives 7% Private college counselor 2% Federal information websites 1% College fair 1% Coach 1% Teacher 1% When students who had already started their research on financial aid were asked their top source of information for it, 52% chose college websites (up from 40% from last year) followed by their high school counselor. The level of parental involvement in their college search seems strongly related to the sources of information students are using to research financial aid. Students whose parents were not involved in their college search were more likely to rely on websites and less on their high school counselors. The level of parental education seems related to the sources of information students are using to research financial aid. First generation students seemed to rely less on the information found on colleges websites and more on their high school counselors than non-first generation students. Net Price Calculator Nearly 70% of respondents had already used or were planning to use a net price calculator 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 strongly related to a student s use of a net price calculator: nearly three-quarters of students with involved parents reported using one. Only 59% of those whose parents are not involved reported the same. Student use of a net price calculator also seems related to their likelihood to have already ruled out schools based on sticker price alone. Those who had used a net price calculator were more likely to have done so than those who had not used a net price calculator. Key Recommendations g 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. g 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. 2015 Ruffalo Noel Levitz 2015 Rising Seniors Perceptions of Financial Aid 7

g 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). g 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 Merit Aid When asked if they thought they would qualify for merit aid, 65% indicated yes, 13% did not expect to qualify, and 22% 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 were students with less involved or not involved parents. Parental level of education also seems related to how students responded to this question. First-generation students were less likely to expect to receive a merit scholarship than those whose parents had graduated college. Do you think you will qualify for a merit scholarship based on your test scores or high school GPA? 13% 22% 65% Yes No I don t know yet 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 than those who had done some or no research. Students who expected to receive a merit scholarship seemed to rely a little more heavily on college websites to gather their information on financial aid than those who did not expect to receive a merit scholarship. Those who did not expect to receive such financial aid relied more on their high school guidance counselors. As one might expect, 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. Need-based aid Do you think you will qualify for need-based aid? When asked if they thought they would qualify for needbased aid, 46% of respondents expected to qualify (up from 43% a year ago). A quarter thought they would not, and 30% did not yet know. 46% 30% 24% Yes No I don t know yet Hispanic and African-American students were more likely than other ethnicities to think they would qualify for needbased aid, while Caucasian and Asian students were more likely to think they would not qualify. 2015 Ruffalo Noel Levitz 2015 Rising Seniors Perceptions of Financial Aid 8

The level of parental involvement in their college search seems related to students perceptions of their eligibility: students with parents not involved at all were more likely to expect to qualify for need-based aid than were students with very or somewhat involved parents. Parental level of education was also related to how students answered this question, with nearly 60% of first-generation students responding that they thought would qualify for need-based aid while only 39% of those whose parents graduated from college expected the same. Students who had 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, 18% expected to receive one before they even applied to a school (down from nearly a quarter a year ago). When do you expect to receive a financial aid offer from a college? 24% 18% 20% 38% After I file a FAFSA Before I apply to a school At the same time I am offered admission I don t know when that happens Twenty-four percent thought they would receive an aid offer at the time of admission, 20% expected to receive an offer after filing a FAFSA, and 38% did not know when an aid offer would be made. Both parental involvement in the college search and parental level of education are related to how students responded to this question. First-generation students and those with parents not involved at all in their college search were more likely to not know when an aid offer takes place than those whose parents graduated from college and those whose parents were very involved in their college search. FAFSA Do you expect to file a FAFSA? Two-thirds of respondents planned to file a FAFSA, while 10% did not. Only 16% did not yet know if they would file the form. 17% 67% 16% Yes No I don t know yet Hispanic and African-American students were more likely to report that they would file a FAFSA, and high ability students were more likely to intend to file a FAFSA relative to average ability students. Parental involvement in the college search process seems related to students responses to this question, with nearly 70% of those whose parents are very involved planning on filing a FAFSA versus only 62% of those whose parents are not involved at all. Parental educational level seemed equally related to students responses to this question with nearly three-quarters of first-generation students expecting to file a FAFSA versus 64% of those whose parents had graduated from college. 2015 Ruffalo Noel Levitz 2015 Rising Seniors Perceptions of Financial Aid 9

Work Do you think you will work while you are in college? How many hours? 33% 30% 17% 5% 8% 7% < 5 hrs/week 6-10 hrs/week 11-20 hrs/week > 20 hrs/week I will work during the summers I don t think I will work When asked if they thought they would work while in college and how many hours they expected to do so, 80% of respondents expected to work six or more hours per week during the school year. Seven percent expected to work during the summers. Half of 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 that 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. College Borrowing When asked if they expected to borrow money to help pay for their undergraduate degree, 44% responded that they did (down from 48% in 2014). Only 11% (compared to 9% last year) did not plan to borrow, and 45% (up from 43% from last year) did not yet know their plans. 44% Are you going to borrow for your undergraduate degree? 11% 45% Planning to borrow Not planning to borrow I don t know How much do you plan to borrow? Caucasian and African-American students were more likely to expect to borrow than were Hispanic and Asian students. Students whose parents had already discussed college financing with them were more likely to plan on borrowing (46%) compared to those whose parents had not yet discussed college financing with them (42%). Sixty-two percent of students who expected to borrow planned to borrow less than $31,000 (up from 57% a year ago); while 30% expected to borrow between $31,000 and $40,000 (down from 34% in 2014); and only 8% planned to borrow more than $40,000, exactly same percentage as in 2014. 62% 30% 8% < $31,000 $31,000-$40,000 > $40,000 African-American students were more likely to expect to borrow between $31,000 and $40,000, while Caucasian students were more likely to plan to borrow less than $31,000, and Asian students were most likely to plan on borrowing more than $40,000. 2015 Ruffalo Noel Levitz 2015 Rising Seniors Perceptions of Financial Aid 10

Students with parents very involved in their college search were more likely to plan to borrow less than $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. Key Recommendations g Make it easy for students to see how much merit aid they will qualify for. g 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. g 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. g 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 one in five 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. Messaging that explains indebtedness and repayment options must be carefully crafted, as their current expectations probably don t realistically reflect how much they will actually need to borrow. Athletic Aid Do you think you will receive an athletic scholarship? 28% 20% 52% Yes No I don t know yet Nearly half of the respondents planned to participate in intercollegiate sports. Fifty-two (up from 47% a year ago) percent of those who planned to participate thought they would receive an athletic scholarship, 28% did not believe they would, and 20% did not yet know. Relative to other ethnicities, African-American students were more likely to think they would be eligible for athletic aid, followed by Caucasian students. Nearly sixty-two percent of Asian students who intended to participate in intercollegiate athletics did not expect to receive an athletic scholarship. Students with parents very involved in their college search were more likely (59%) to think they would qualify for athletic scholarships than those whose parents were not involved at all in their college search (41%). Academic ability seems strongly related to students expectation to receive an athletic scholarship, with high academic ability students more likely to expect to receive an athletic scholarship than average academic ability. 2015 Ruffalo Noel Levitz 2015 Rising Seniors Perceptions of Financial Aid 11

Influence of athletic aid decision on where to attend 12% 9% 38% 41% It will influence my decision very much It will influence my decision It will influence my decision slightly It will not influence my decision very much Gender was also related to the expectation of athletic scholarships, with nearly 68% of the males expecting to receive an athletic scholarship versus 43% of females. Of the respondents interested in participating in intercollegiate sports, three-quarters considered their eligibility for athletic-based aid influential in deciding which college to attend. Forty-one (up from 32% a year ago) percent indicated this will influence their decision very much, and another 50% reported it will be an influence. Just less than one in ten indicated it would not influence very much their decision on where to attend. Key Recommendations g Make sure there s good communication and coordination among the athletic department, admissions, and financial aid on awards being offered to students. g Be transparent and thorough in how athletic scholarships are discussed: the percentage of students expecting an athletic scholarship is very unrealistic. The process must be well-explained in materials, on the web, and by admissions and athletic staff. 2015 Ruffalo Noel Levitz 2015 Rising Seniors Perceptions of Financial Aid 12

Methodology This study is based on the Ruffalo Noel Levitz and Scannell & Kurz survey, 2015 Rising Seniors Perceptions on Financial Aid, which in June 2014 obtained interviews with a nationally representative sample of 1,556 teens who will graduate from high school in 2015 (with a population of 15,000 and a response rate of 10%). The surveys were conducted by Ruffalo Noel Levitz via telephone and email. The sample demographic breakdown is shown in Figure 1. Figure 1: Sample Demographic Breakdown Midwest 20% High academic ability 56% Asian 12% Female 45% Northeast 17% Average academic ability 44% African-American 33% Male 55% South 33% Hispanic 27% West 30% Caucasian 28% 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 enrollment management community. Based on our own enrollment experience and insight from enrollment management professionals all over the country, we ve developed highly sophisticated admissions, financial aid, and student success services that span student search through graduation. If you re interested in a truly strategic approach to your enrollment management efforts, contact us to learn more. About Ruffalo Noel Levitz Ruffalo Noel Levitz is the leading provider of technology-enabled services, software, and consulting for higher education enrollment management and fundraising. More than 1,800 colleges, universities, and nonprofit organizations rely on the company s solutions to help achieve their mission. Harnessing the power of advanced research, analytics, and multichannel marketing combined with a deep understanding of higher education and nonprofit environments, Ruffalo Noel Levitz helps clients smartly identify, efficiently reach, and meaningfully connect with their key constituents at pivotal moments from admission and financial aid to student retention, alumni engagement, and fundraising. The result is more of the right individuals engaged with the right organizations and a sound financial foundation to pursue great outcomes together. To learn more, visit www.ruffalonl.com. 2015 Ruffalo Noel Levitz 2015 Rising Seniors Perceptions of Financial Aid 13

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 a student may be eligible. How to cite this report Bermejo, R. (2015). 2015 Rising Seniors Perceptions of Financial Aid. Cedar Rapids, IA: Ruffalo Noel Levitz. Retrieved from www.ruffalocody.com All material in this document is copyright by Ruffalo Noel Levitz. Permission is required to redistribute information from Ruffalo Noel Levitz, either in print or electronically. Please contact us at Raquel.Bermejo@RuffaloNL.com about reusing material from this document. 03.15 2015 Ruffalo Noel Levitz 2015 Rising Seniors Perceptions of Financial Aid 14