1. THE NEW FINANCIAL AID FAMILY KRISTEN C. POWER NATIONAL
DIRECTOR, BUSINESS DEVELOPMENT JULY 9TH, 2015
2. During this session, we will: #BBK12UC Explore the dynamics
and implications that the evolving applicant pool is bringing to
school financial aid offices Discover how to reshape policies and
budgets to meet what the new aid families bring to the table
Examine ways to communicate and align expectations to increase
timely and open participation in the process
3. Dynamics of the Evolving Applicant Pool Whos seeking
financial aid? #BBK12UC 10.2 18.7 20.3 17.2 12.5 8.1 6.5 6.4 6.6
12.8 14.8 14 12.4 9.9 10.7 18.8 6.4 10.9 12.6 12.4 11.8 10.1 11.8
23.9 0 5 10 15 20 25 0-20K 20-40K 40-60K 60-80K 80-100K 100-120K
120-150K 150K+ 02-03 09-10 14-15 Range of Total Family Income
Source: SSS By NAIS PFS Filer Pool. Reflects total income from all
sources, before taxes or allowances, as reported by families on the
PFS submitted.
4. Dynamics of The Evolving Applicant Pool #BBK12UC Whos
seeking financial aid? Quintile US Families SSS Filers Lowest $0 -
$27,794 10.1% Second $27,795 - $49,788 13.2% Third $49,789 -
$76,538 17.0% Fourth $76,539 - $119,001 23.6% Highest $119,002 and
greater 36.2% Top 5% $210,000 and above 10.5%
5. Dynamics of the Evolving Applicant Pool -Why the dramatic
demand shift? Income growth fell dramatically #BBK12UC 0.00% 1.00%
2.00% 3.00% 4.00% 5.00% 6.00% 7.00% 8.00% 9.00% Lowest Fifth Second
Fifth Third Fifth Fourth Fifth Highest Fifth Top 5 Percent 1960s
1970s 1980s 1990s 2000s
6. #BBK12UC Family Income Quintiles, 2013 (US Census Bureau)
Sample Academy % of Financial Aid Applicants Sample Academy % of
Financial Aid Recipients Sample Academy Avg Grant $0 - $27,794
10.6% 2.6% $26,150 $27,795 - $49788 14.3% 8.6% $23,242 $49,789 -
$76,538 14.3% 12.9% $24,030 $76,539 - $119,001 14.7% 23.2% $16,794
Over $119,001 46.1% 52.9% $14,159 Dynamics of the Evolving
Applicant Pool -Why the dramatic demand shift? Income growth fell
dramatically
7. Dynamics of The Evolving Applicant Pool What are these new
applicants like? Characteristics of the New Financial Aid Family
Higher income, higher net worth More assertive, less of a sense of
shame More entrepreneurial, savvy investors Access to better
choices or alternatives More accustomed to having influence over
decisions #BBK12UC
8. Dynamics of The Evolving Applicant Pool How do they feel
about the aid process? #BBK12UC
9. Dynamics of The Evolving Applicant Pool How do they manage
to pay tuition? #BBK12UC
10. Dynamics of The Evolving Applicant Pool Whats the role of
borrowing? Only 13% of parents reporting borrowing from some source
to help pay school costs (other than home equity loans) Of those
who reported borrowing, the sources were: #BBK12UC
11. Implications for The Aid Office Goals and Outcomes Is your
aid investment serving who you think it should serve? Does the
distribution of aid match the financial aid mission? Are the lower
and true middle-income families succumbing to sticker shock to
greater degrees? Is the commitment to high- or moderate-need
applicants shifting to low-need applicants? Are returning students
receiving more aid than anticipated or planned for? Time and
Relationship Management More applications, more complexity, more
follow-up Increase staff knowledge and training to utilize
available tools Ability to tap into networks, experts, and others
Managing pushback, appeals and negotiating #BBK12UC
12. Reshaping Policies and Procedures Self-employment and net
worth issues Business expenses, write-offs Depreciation treatment,
negative income and cash flow Investment transactions, home and
other real estate equity Debt and lifestyle issues Allowable vs
nonallowable indebtedness Discretionary debt vs emergency or
necessary debt Choice vs obligation Be careful of biased
subjectivitystay objective #BBK12UC
13. Reshaping Budgets and Resource Needs Key Challenge: MONEY
Typical school meets, on average, 69% of demonstrated financial
need 11% of schools reported meeting 100% of need Gapping is more
easily overcome by high-income, low-need families Only 8% of
reviewed applicants did not qualify for some help 86% of schools
report that the #1 stressor is balancing limited dollars with
expanding demand Old News a lesser strain on aid budgets as
recession effects wane slowly Returning families new to aid Not
typically anticipated in budget-setting Proactively account for
that new need #BBK12UC
14. Reshaping Budgets and Resource Needs Key Challenge: TIME
Typical aid professional spends 24% of his/her time managing the
aid responsibilities and tasks Only 30% feel that the amount of
time they spend on making a financial aid award decision is just
right 50% report that there are too few weeks allotted for managing
the overall awarding process 100% of full-time aid directors
reported that the time spent making individual decisions AND the
timespan of the overall process were just right Tended to receive
fewer financial aid applications Tended to process more
applications (in numbers and percentage that needed review) Tended
to get a higher yield among the financial aid applicants
#BBK12UC
15. Establishing and Communicating Expectations Generation X =
born 1965 1981; Roughly 30 50 year olds 1. Hold the highest
education level of any age group 2. Active, balanced,
family-oriented, more heterogeneous, more accepting of social
diversity than previous generations 3. Less likely to idolize
leaders and hold casual disdain for authority; more likely to work
towards systematic change through economic, media, and consumer
action than direct rebellion or ouster of leaders 4. Experience
several career changes due to lower sense of loyalty to
institutions, and chaotic nature of the job market; work to live
not live to work 5. Income growth for men has slowed; growth in
family incomes driven by women entering the workforce 6.
Independent, tech-savvy, resourceful, hands-on, entrepreneurial,
start-up/small-business minded, willing to take risks,
customer-focused #BBK12UC
16. Establishing and Communicating Expectations Educate,
educate, educate The more you share, the better-aligned their
expectations will be Be clear about the pressures on your aid
budget and the distribution of your applicant pool Help them put
their own situation in a context outside of themselves (or their
neighbors) Be ready to teach a family to understand all the factors
driving your decision #BBK12UC
17. Questions/Reactions? #BBK12UC
18. Today We Covered The dynamics and implications that the
evolving applicant pool is bringing to school financial aid offices
Reshaping policies and budgets to meet what the new aid families
bring to the table Ways to communicate and align expectations to
increase timely and open participation in the process #BBK12UC
19. Presenter Information Kristen Power National Director,
Business Development SSS by NAIS [email protected] Phone: 603-770-0145
#BBK12UC