Scholarships and Aid Related to Undergraduate Education

Ann J. Korschgen, Ph.D.

Vice Provost for Enrollment Management

Division of Enrollment Management

January 27, 2015

Budget Allocation Advisory Council (BAAC)

Our Goals in Enrollment Management

To recruit, enroll and support a student population that is high ability, diverse, growing in number, and generating net tuition revenue

How We Pursued Enrollment Goals

Started recruiting out-of-state in 2004

Improved customer service to prospective students through a CRM (Customer Relationship Management system) and other communication enhancements

Enhanced scholarship offerings to increase enrollments of targeted populations and to generate net new tuition revenue

Impact of Enrollment Management Strategy

Enrollment has grown from 23,666 in 2001 to 35,441 in 2014. An increase of 11,775 or 50%

Tuition revenue has grown from $69,576,261 in 2001 to $268,057,045 in 2014. An increase of almost $200,000,000 or 285%

Impact of Out-of-State Recruiting EffortsOne example:

Out-of-state enrollment in 2004: 4,951

Out-of-state enrollment in 2014: 10,855

Increase: 5,904 students representing $85,023,777 in increased tuition revenue

Also Increased non-resident minority enrollment by 102% (2,772 students)

The Impact of Scholarships

Faced increasing competition from other universities—especially SEC schools—that offer larger scholarships:

What we did: For fall 2014 created new scholarship and increased others

Result:

5.2% growth in first-time-college students (or 321) 26% growth in high ability students (ACT of 30+)

What are Scholarships?

Scholarships are a way to: Make college more affordable

Reward hard work in high school

Increase yield among admitted students

Collect more tuition revenue—i.e. many students would not attend if not for scholarships

Evidence of importance: Fall 2013 and enrollment decline—with negative budget consequences—when competitors were offering more substantial scholarships

How We Model Scholarships to Increase Net Tuition Revenue

Identify target group of applicants – usually high ability admits, often from multiple years

Calculate descriptive statistics on enrollment, financial aid, etc.

Run statistical model on historical data that quantifies how gift aid affected yield rate for the group of admits

Use results of statistical model to predict change in enrollments from proposed changes in gift aid (e.g., add $1,000, remove $2,500, etc.)

Use costing model to determine how predicted changes in enrollment from changes to MU scholarships (discounts) would impact net tuition revenues

Predicted positive change in net tuition revenue is a necessary (but not sufficient) condition for implementing change to university scholarship

Debate on Discount Rate

Definition: Percent of tuition revenue discounted for scholarships.

Mizzou discount rate: 20%. (In 2002, it was 23%)

Some schools may have lower rates, but:

Are of greater prestige Or near mountains, oceans, or lakes Or have lower tuition Or have better state support Or enroll lower ability students and don’t attract high ability students

What are the Discounts Due to Scholarships?

In 2014 it was $54 million.

Of that $39 million was performance based, $12 million was need based, and the remaining was for non-resident tax credit and other miscellaneous programs.

In fall 2014 net Tuition revenue was $213,628,487

In 2002, it was only $69,576,261

How Do We Award Scholarships?

The current recruitment environment necessitates automatic scholarships

Recruited students are used to immediate responses.

Automatic awards are based on test score and class rank. 

Students are informed of awards in their admit letters.

Early notice is important in student yield

What Does It All Mean?

Scholarships have enabled us to shape our student body, grow our enrollment and increase very significantly our net tuition revenue.

However, to be effective, they have to be combined with strategic recruiting and modeling as have been done the last 12 years