Student Lending Analytics Flash Survey: The Economic ... · SLA Flash Survey: The Economic Crisis...

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Student Lending Analytics Flash Survey: The Economic Crisis and Financial Aid

November 19, 2008

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SLA Flash Survey: The Economic Crisis and Financial Aid Background

Headlines today show how the economic crisis is spilling over into higher education

– Economic crisis squeezing colleges, universities (McClatchy Washington Bureau, DC)

– Their budgets slashed, public colleges share in their applicants' economic pain (The Chronicle of Higher Education)

– Small colleges being forced to institute furloughs in response to economic downturn (Inside Higher Ed)

– Colleges consider suing over endowment losses (The Chronicle of Higher Education)

– State universities and colleges wade into uncertain economic times (Capital Times, WI)

– Colleges shift donor appeals toward direct student aid (Wall Street Journal)– Analysis: Community colleges suddenly in spotlight (Associated Press)

Survey Goals– Understand prevalence and size of budget changes being made to financial

aid operating budgets– Understand anticipated impact of economic crisis on institutional grants

http://www.mcclatchydc.com/homepage/story/56167.html

http://chronicle.com/daily/2008/11/7583n.htm?utm_source=at&utm_medium=en

http://www.insidehighered.com/news/2008/11/19/furlough

http://chronicle.com/daily/2008/11/7571n.htm

http://chronicle.com/daily/2008/11/7571n.htm

http://www.madison.com/tct/news/stories/314903

http://www.madison.com/tct/news/stories/314903

http://online.wsj.com/article/SB122714511244243207.html?mod=googlenews_wsj

http://www.google.com/hostednews/ap/article/ALeqM5jnZ4qcsxF8zJe_kTEVdmSlv11UowD94I7G402


SLA Flash Survey: The Economic Crisis and Financial Aid Methodology

Emailed flash survey on November 18, 2008 with due date of November 19, 2008.

In addition to demographic questions, the survey asked respondents the following questions– Financial Aid Office Operating Budgets

• What change, if any, do you anticipate in the financial aid office operating budget (e.g., staffing, training, office equipment) for the remainder of 2008-09 (e.g., what is the size of the mid-year budget adjustment)?

• What change, if any, do you anticipate in the financial aid office operating budget (e.g., staffing, training, office equipment) for 2009-10 compared to 2008-09?

• What financial aid office costs will be impacted by any new budgetary changes, for the mid-year 2008-09 correction and/or 2009-10 fiscal year (Please mark all that apply)?

• Please indicate creative solutions your team has developed to reduce operating costs in the financial aid office.


SLA Flash Survey: The Economic Crisis and Financial Aid Methodology (Cont.)

Questions (cont.)– Institutional Grants

• What do you anticipate the impact of the economic crisis will be on the funds available for institutional grants at your institution for the 2009-10 academic year (as compared to 2008-09)?

• Depending on answer to question, respondent answered one of the following questions:

– What are the strategies that your institution is considering to compensate for the shortfall in funding institutional grants?

– What are the strategies that your institution is considering to fund the increased demand for institutional grants?

Responses were normalized for following reasons:– Email addresses that did not correspond with an educational institution were

excluded• Several lenders responded; their responses were excluded

– Several schools provided multiple responses; only one response was analyzed

Overall, there were 357 survey responses analyzed


SLA Flash Survey: The Economic Crisis and Financial Aid Profile of Survey Participants

School Type

0%

20%

40%

60%

4-Year Private 4-Year Public 2-Year Public Other

School Ownership

0%10%20%30%40%50%60%

Private Public Other

School Region

0.0%

10.0%

20.0%

30.0%

South Midwest Northeast West

Cost of Attendance

0%10%20%30%

Less th

an $5,000

$5,001 -

$10,000

$10,001 - $15,0

00$15,001 - $

20,000

$20,001 - $30,0

00$30,001 - $

40,000

Over $4

0,000


SLA Flash Survey: The Economic Crisis and Financial Aid Summary

Only 3.8% of respondents indicated that their institution had implemented a mid-year tuition increase– 2-year publics had the highest prevalence of mid-year tuition increases with

6.4% indicating they had increased tuition mid-year

Overall, 28% of respondents anticipate a mid-year reduction in their financial aid operating budgets– 14% expect a 1-5% reduction– 10% expect a 6-10% reduction– 4% expect a reduction greater than 10%

Public institutions expect more mid-year budget cuts than private institutions– 44% of 2-year public institutions and 34% of 4-year public institutions

responding to the survey expect to see a reduction in their mid-year budget– 23% of 4-year private institutions indicated that they expect a mid-year

budget reduction


SLA Flash Survey: The Economic Crisis and Financial Aid Summary (Continued)

For 2009-10, the financial aid office operating budget picture is expected to worsen:– 47% of two-year publics and four-year publics are anticipating a decrease in

their operating budgets• 15% of two-year publics and 10% of four-year publics are anticipating

over a 10% reduction in their operating budget

The top three cost areas likely to be impacted by these budget cuts– Conferences and travel expenses 57%– Office equipment and supplies 43%– Staff training 33%

Respondents provided over 100+ responses to question regarding cost-saving opportunities (to be provided under separate cover)


SLA Flash Survey: The Economic Crisis and Financial Aid Summary (Continued)

In terms of the anticipated institutional grants for 2009-10, almost 1 in 3 respondents (32%) were not sure what to expect at this point in time– 4-year publics were most uncertain about their institutional funding situation

with 45% indicating that they didn’t know what to expect

Overall, 20% of respondents expect to see a drop in their institutional grants for the 2009-10 academic year – Almost 15% indicated they expect to see a 1-9% reduction in institutional

funds


SLA Flash Survey: The Economic Crisis and Financial Aid Prevalence of Mid-Year Tuition Increases (Overall)

3.8%

6.4%

5.4%

1.1%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

Overall 2-Year Public 4-Year Public 4-Year Private

Perc

enta

ge o

f Res

pond

ents

Indi

catin

g M

id-Y

ear

Tui

tion

Incr

ease

Survey question: Has you school announced (or are they planning to announce) a mid-year tuition increase?


SLA Flash Survey: The Economic Crisis and Financial Aid Mid-Year Financial Aid Operating Budget Adjustment (Overall)

4%

14%

53%

2% 2% 1%

15%10%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

Over 10%reduction

6%-10%reduction

1%-5%reduction

No change 1%-5%increase

6%-10%increase

Over 10%increase

Not sureat thistime

Perc

enta

ge o

f Tot

al R

espo

nden

ts

Survey question: What change, if any, do you anticipate in the financial aid office operating budget (e.g., staffing, training, office equipment) for the remainder of 2008-09 (e.g., what is the size of the mid-year budget adjustment)?


SLA Flash Survey: The Economic Crisis and Financial Aid Mid-Year Financial Aid Operating Budget Adjustment (By School Type)

11% 11%

2%

21%

4%

15% 15%

45%

3%

17%

3% 5%

11%

32%

23%

4%

15%

63%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

Over 10%reduction

6% - 10%reduction

1% - 5%reduction

No change BudgetIncrease

Not sure atthis time

Perc

enta

ge o

f Tot

al R

espo

nden

ts

2-Year Public4-Year Public4-Year Private

Survey question: What change, if any, do you anticipate in the financial aid office operating budget (e.g., staffing, training, office equipment) for the remainder of 2008-09 (e.g., what is the size of the mid-year budget adjustment)?


SLA Flash Survey: The Economic Crisis and Financial Aid Anticipated Budget Adjustment for 2009-10 (Overall)

6%

21%

26%

9%

3%

23%

12%

0.0%

10.0%

20.0%

30.0%

Over 10%reduction

6%-10%reduction

1%-5%reduction


Over 5%increase

Not sure atthis time

Perc

enta

ge o

f Tot

al R

espo

nden

ts

Survey question: What change, if any, do you anticipate in the financial aid office operating budget (e.g., staffing, training, office equipment) for 2009-10 compared to 2008-09?


SLA Flash Survey: The Economic Crisis and Financial Aid Anticipated Budget Adjustment for 2009-10 (By School Type)

15%13%

4%2%

21%

10%

15%

22%24%

2%

25%

2%

10%

24%26%

19%

2% 2%

11%

23%

28%

0.0%

10.0%

20.0%

30.0%

Over 10%reduction

6%-10%reduction

1%-5%reduction

Nochange

1%-5%increase

Over 5%increase

Not sureat thistime

Perc

enta

ge o

f Tot

al R

espo

nden

ts


Survey question: What change, if any, do you anticipate in the financial aid office operating budget (e.g., staffing, training, office equipment) for 2009-10 compared to 2008-09?


SLA Flash Survey: The Economic Crisis and Financial Aid Specific Costs Impacted By Budgetary Changes

57%

32%

27%

11%

5%

43%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

Conf. and Travel OfficeEquip./Supplies

Training Staffing Consulting Outsourcedservices

Perc

enta

ge o

f Tot

al R

espo

nden

ts

Survey question: What financial aid office costs will be impacted by any new budgetary changes, for the mid-year 2008-09 correction and/or 2009-10 fiscal year (Please mark all that apply)?


SLA Flash Survey: The Economic Crisis and Financial Aid Cost-Savings Opportunities

Increasing usage of web applications and electronic communication of award letters– “We are creating an electronic financial aid application which will eliminate

the postal cost of mailing a paper application.”– “Developed an electronic award review process that will save significant

amounts in printing and postage.”– “Electronic award letters, electronic forms bank - both reduce copy costs

and mailing.”– “Email award letters and other correspondences to students to save on

postage and paper.”

Increased usage of email to communicate with students to cut printing and postage costs:– “Sending all notifications to student through their college email”– “It's not all that creative - moving toward more e-mail and more posting of

general information on the web.”


SLA Flash Survey: The Economic Crisis and Financial Aid Cost-Savings Opportunities (Cont.)

Increased usage of webinars for training to reduce travel expense– “Taking advantage of webinars for training”– “More webinars, less travel”

Using students for part-time, administrative tasks– “Student/temporary staff assistance for some phone and receptionist

services”– “…staff front desk with rotation of student staff”

Push for “the paperless office”– “We have moved to a paperless office for 2008-2009 and that has saved us

approximately $1,000 in supplies”– “…preparing to implement an imaging solution so we will be paperless”– “Moving to scanning operation to eliminate paper (this was in the works

before the economic crisis hit)”


SLA Flash Survey: The Economic Crisis and Financial Aid Anticipated Change in Institutional Grants for 2009-10 (Overall)

1%

15%

28%

16%

4%

32%

4%

0.0%

10.0%

20.0%

30.0%

40.0%

Over 20%decrease

10%-20%decrease

1%-9%decrease


Over 10%increase

Not sure at thispoint

Perc

enta

ge o

f Tot

al R

espo

nden

ts

Survey question: What do you anticipate the impact of the economic crisis will be on the funds available for institutional grants at your institution for the 2009-10 academic year (as compared to 2008-09)?


SLA Flash Survey: The Economic Crisis and Financial Aid Anticipated Change in Institutional Grants for 2009-10 (By School Type)

2%

11% 11%

38%

0% 0%

38%

0%

6%

20% 21%

6%2%

45%

2%

14%

26% 26%

6%

24%

2%0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

Over20%

decrease

10%-20%decrease

1%-9%decrease

Nochange

1%-9%increase

Over10%

increase

Not sureat thispoint

Perc

ent o

f Tot

al R

espo

nden

ts


Survey question: What do you anticipate the impact of the economic crisis will be on the funds available for institutional grants at your institution for the 2009-10 academic year (as compared to 2008-09)?


SLA Flash Survey: The Economic Crisis and Financial Aid Strategies to Fund Institutional Grants

“Cutting costs in other areas of campus and helping students qualify for more of the new aid programs wherever possible. We try to look at net revenue to the institution versus total gross tuition revenue.”“More aggressive fund raising, especially for annual gifts.”“We are anticipating increased institutional grants of about $200,000 for 09- 10. If there are no alternative loans available, we would need to replace $2.5 million from lost loan eligibility. If students/families are unable to obtain a PLUS loan or pay as they go, we anticipate a reduction in student population.”“Providing increased grant amounts on a one year basis, rather than promising the extra funding will be available for the remainder of the educational program.”“Higher self-help expectations Need aware admission.”“The institution has taken a close look at all operating budget requests for this year and next and has capped spending levels at the 2008-2009 levels. Although endowment earnings are down we anticipate a surplus of tuition revenue that should help off-set additional expenditures in need-based grant aid.”


SLA Flash Survey: The Economic Crisis and Financial Aid Strategies to Fund Institutional Grants

“We have approached targeted individuals with requests for special funds for students affected by the economic downturn.”“Higher tuition and request increase in percentage allocated from endowment.”“Trying to get students to apply for outside scholarships & grants. It is difficult for our students because the majority of our students are graduate and professional programs.”“Recruiting more Cal Grant recipients by guaranteeing them an institutional match.”“Increasing our admission applicant pool so that we can withstand more students turning us down because they can't afford it.”“As a state institution, there is a push to increase in-state enrollment which has the possibility of increasing aid available to out-of-state students.”“We are examining our available income from endowment funds to determine if we could use a more generous spending policy. Also, we do have some financial reserves that were intended for plant expenditures, but now a portion is being considered for financial aid.”


Thank You

Thank you again for your participation!

Please contact Tim Ranzetta if you have any additional comments or questions regarding this survey– Send email to [email protected] if you would like to

receive the comprehensive results with responses and comments for all lenders

– Phone: 650-858-2724 X10

Look for more upcoming SLA Flash Surveys in the future

For more information on Student Lending Analytics, proceed to the final three slides


Student Lending Analytics Background

Founded in 2007Independent Research and Advisory Service with NO lender affiliationsMission: Find best lenders for students through an analytically rigorous, unbiased and comprehensive processServices

– RFI Management of FFEL and Private Loans– Research

Successes to Date– Managed RFI process at institutions with over one billion dollars in loan volume– Inside Student Lending, our monthly newsletter, reaches over 5,000 financial aid

administrators– Student Lending Analytics Blog has become the go-to source for breaking

developments and analysis on the student lending industry– SLA Flash Surveys have included the insights from over 1,500 financial aid

professionals on a variety of timely topics– Private Loan Options and the SLA’s 2008 Alternative Loan Guide provides

students and financial aid offices with an objective and focused list of private lenders– SLA Student Satisfaction Surveys measures student satisfaction with lenders


The Student Lending Analytics Process RFI Management


Student Lending Analytics Research Services

Inform financial aid offices on industry developments (implications for their lender lists and relationships)

– Student Lending Analytics Blog• Timely insights to developments in student lending industry

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– Legislative and regulatory updates– White papers– Help Line to answer questions/resolve issues throughout the year

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