The Role of Interim Leaders in Enhancing Financial Aid Operations and Processes
Dr. Nayyer Hussain
Interim Chief Financial Officer
Ursuline College (Pepper Pike, Ohio)
The focus of this article is the rising costs associated with higher education and how enhancing financial aid practices and processes can improve retention and ensure greater success for students. As members of the Registry, we will be working with these challenges when we accept assignments in academic, finance, and enrollment management areas of the institution. This is particularly true if our assignments are with small colleges that are heavily dependent on tuition revenues (can be as high as 90 percent). In academic affairs, these factors will impact greatly in student retention, planning for new academic programs and graduation rates. For finance the biggest challenge is stabilizing revenues and working with other areas to find new avenues of revenue growth. In the area of enrollment management, the biggest challenge from these factors will be to meet enrollment goals that are critical for a school’s financial well-being. If financial aid to students can be provided to cover the duration of their degree programs, then it will positively impact the percentage of returning students and hence reduce the continual pressure to recruit larger cohorts.
Registry members bring a depth of experience to their interim assignments. So, an important component of our work with colleges will be to devise ways to reduce a student’s financial uncertainty so they can focus attention on their educational goals. According to the U.S. Department of Education from 1980 to 2014, college tuition has increased by 260% compared to 120% price increases for all other items. Furthermore, in 2014-15, according to the College Board, tuition increased by an average of 3.7%, much higher than the rate of consumer price index. Also, of note is that the ten-year historical rate of increase in tuition was 5%.
When we consider additional costs such as room and board, educational materials, transportation, etc., then the annual cost of attendance can easily range from $25,000 (in-state residents attending a public institution) to as high as $60,000 for a private college.
A major cause for many students, especially first-generation students, not being able to complete college is the lack of financial resources, including uncertainty of the cost after the first year. If we can improve this process by providing a greater level of certainty for the cost of a four-year degree, then students and their families can better plan financially and make more informed decisions.
Institutions of higher education could take the following steps to improve the financial aid process:
1) Fixed-Tuition Charges for Four Years
A major reason many students drop out after their first year is due to what is called the ‘aid gap.’ The financial aid is for the first year only giving them the net cost for attendance. Colleges should go one step further. They should fix the tuition charges for each entering cohort for the entire four-years. This will eliminate annual tuition rate increases so students will know exactly the tuition they will be charged from the first day they enter college.
If the tuition cost is fixed, financial aid packages can be estimated for the entire four-years with a greater degree of certainty. For most families their income does not change significantly from year to year and after the aid package they will know more precisely the net cost and the expected family contribution for all four years. This will greatly reduce the uncertainty relating to the cost of education for four years.
Some colleges have started to provide an estimate of the cost for four years, but it still leaves some uncertainty as to the total cost of attendance. The better policy would be to fix the tuition for each cohort for the degree program. This will enable financial aid to be awarded for four years and students and their families will know exactly the net cost of the degree program.
2) High School Students Should be Encouraged to Take More College Level Courses
This not only provides valuable preparation for college level academics and expected coursework, and if planned correctly, could also be used to satisfy some of the general education requirements ahead of time thereby reducing the total cost of their college education. To provide an additional incentive to take on this extra workload, eligible students should be allowed to get Pell Grant or similar type of financial assistance, if they meet the eligibility requirements. This would be particularly beneficial in generating interest among first-generation students to pursue a college education.
By taking these and other steps to enhance the financial aid process, we can better serve our students by allowing them to focus their efforts on completing their degree/vocational training instead of worrying about the uncertainty of financing the cost of their education. Since Registry members often work as senior administrators in a variety of institutions, they bring with them a wealth of experience that can be applied to this challenge. When they accept an interim assignment, they can use their knowledge and work with the school’s administration to create solutions such as those above that best serve the needs of that college or university. The focus is to make sure that uncertainties relating to the cost can be minimized. This means that students and their families should be made aware of the total cost of their degree program. By providing financial aid information for the duration of studies, it will create a higher level of certainty for students and their families as to the resources needed to pay for their education, as the cost of education remains a major deterrent for most students and particularly first-generation college students from pursing and completing a college degree.