Using Merit-Based Financial Aid to Positively Impact Enrollment
- By Catherine Cook, Dr. Scott D. Miller
- March 1st, 2004
Merit, or talent-based financial assistance, is widely used in higher education because its use has proven effective in helping to support recruitment objectives. Moreover, many institutions have found that offering these funds to all eligible prospective students even before these students apply for admission can further enhance the effectiveness of such a program. This trend toward "front-loading" merit aid programs enables some colleges and universities to influence the size and characteristics of their applicant pools. For example, Wesley College, a private coeducational liberal arts college in Dover, Del., has increased its headcount from 1,052 to 2,305 students in five years (1998-2003) and its operating budget from $10.5 million to $25.6 million by using this approach.
The manner in which many institutions have made students aware of their award eligibility has compromised the effectiveness of this strategy in building or shaping their applicant pools. In addition, the timing of the award within the admissions funnel is critical to the ultimate success of such enrollment strategies.
Pitfalls in Award Publicity
Many colleges have successfully determined award parameters in advance of the application process, publishing these on admissions Websites and in print pieces such as view books and search pieces. Experience, however, shows that eligible students and families who are only marginally interested in a given institution tend not to pay close attention to such materials.
Alternatively, other institutions send targeted direct mailings to prospective students. Unless the college enjoys strong "brand" recognition within the student's market, or the student is already interested in attending the college, the likelihood is high that such unsolicited mailings will be discarded without even being opened.
Some institutions personalize the process by using the telephone to inform students of their award eligibility. Wesley, for example, makes merit-based pre-awards of financial aid to all prospective students via telecounselors using lists provided by college search mechanisms. This more focused strategy, however, still depends upon students and families acting upon the message.
Using Merit Aid to Increase Conversion Rates
Instead of publicizing the availability of merit aid before the student has applied or been accepted, many institutions wait until applicants have been admitted. Experience has shown that such a strategy will mod-erately improve conversion rates (i.e., the percentage of inquirers who actually apply for admission). For example, if an institution's conversion rate was 30 percent prior to such notification, the scholarship notification might increase conversion to about 33 percent, or from 150 first-year students to 165, given an applicant pool of 500. (For the sake of simplicity, this example assumes that all admissible students are eligible for merit assistance).
The impact of this higher conversion rate is limited, however, because the introduction of a merit scholarship program does not increase the applicant pool. It simply improves the institution's chances of "closing the sale."
Selective Discounting After Admission
A third strategy, noted in a recent NACUBO discounting survey, is to offer selective (differential) discounts to certain categories of students -- i.e., residents of certain geographic areas, children of alumni, members of selective honor societies -- after admission. This strategy of determining discounts only after a student's application has been received influences only the yield rate (i.e., the percentage of accepted students who enroll).
Whichever strategy a given institution uses, it is vital to start with the end result - a larger applicant pool. Regardless of the enrollment objective, the ultimate success of any recruitment program is tied to the number of applications for each available seat.
Determining award parameters in advance of the application process and making prospective students aware of their award eligibility can enhance the effectiveness of a merit scholarship program. Using this strategy in conjunction with financial aid to increase the size of the applicant pool by increasing the conversion rate can produce significant results.
Dr. Catherine Cook is chief executive officer of Miller/Cook & Associates, Inc., an enrollment management consulting firm with offices in Marco Island, Fla., and Roanoke, Va.
Dr. Scott D. Miller is president of Wesley College, Dover, Del. He is beginning his 14th year as a CEO and often consults and lectures on this topic.
Dr. Scott D. Miller is president of Virginia Wesleyan College in Norfolk/Virginia Beach, Virginia. He was previously president of Bethany College, Wesley College, and Lincoln Memorial University. He is chair of the Board of Directors of Academic Search, Inc. and serves as a consultant to college presidents and boards.