The Power of Dynamic Thinking

1. The Power of Dynamic Thinking Reaching Across Boundaries in Default Aversion

2. Will that doctor be sued? • What is the number one determinant – identified by statisticians and actuaries – as to whether or not a doctor will be sued?

3. Keeping It Simple Isn’t Always Right Static Model: Doctor Treats Patient Doctor Makes A Mistake Doctor Sued

4. Will that doctor be sued? • Q: What is the number one determinant – identified by statisticians and actuaries – as to whether or not a doctor will be sued? • A: The amount of time that a doctor spends with that patient • Gladwell, M. (2007). Blink: The Power of Thinking Without Thinking

5. Dynamic Thinking • Static thinking is a formalized process that depicts events but does not address the underlying forces (dynamics) that may have an impact on that event or series of events.  • Dynamic thinking is the study of the interconnected relationships on an event and the impact of those interactions upon the outcomes of the system.

6. Keeping It Simple Isn’t Always Right Dynamic Model: Doctor Sued Doctor Treats Patient Doctor Builds A Relationship w/ Patient Doctor Makes A Mistake Patient Evaluates Malpractice Relative To Relationship Doctor Not Sued

7. Static vs. Dynamic Thinking and Policy Static Model: Policies that give patients less face-time with the doctor Dynamic Model: Policies that don’t just focus on fewer mistakes, but that focus on the patient

8. Default Prevention: Static vs. Dynamic • Effective default prevention is a dynamic process • We cannot take a picture of it because there are several interrelated, moving parts

9. One-Minute Recap of Previous Symposia • Session 1: Provided context to this discussion by telling us about the state-of-mind of our students • Session 2: Gave us specific information about our students’ borrowing habits as well as a fundamental basis for institutional research

10. Static Default Prevention Model Student Takes Out Loan Borrower Goes 270 Days W/out Payment Borrower Defaults

11. Static Default Prevention Model Student Takes Out Loan Student Borrower Drops Out of School Borrower Goes 270 Days W/out Payment Borrower Defaults

12. What are the dynamic forces that affect student loan default? • Failing classes: positive correlation with default • Number of credit hours (mixed results): negative correlation with default • Whether or not they work outside of school (mixed results): negative correlation with default • GPA: negative correlation with default • Feelings about school/education: negative correlation with default • Graduate: negative correlation with default

13. Justin Draeger – National Association of Student Financial Aid Administrators

14. Justin Draeger – National Association of Student Financial Aid Administrators

15. Justin Draeger – National Association of Student Financial Aid Administrators

16. “Student Success” • Increase year-to-year retention • Increase degree completion • Increase on-time completion rates

17. Examining Policies With Dynamics In Mind Student Default Aversion Policy

18. Examining Policies With Dynamics In Mind • Why So Difficult? • Follow the Money – It’s All About Access • College readiness dollars come to less than one percent of all other federal grant and campus-based funds • Percentage of students that require remediation is up to around 60 percent

19. Access v. Success

20. Access v. Success

21. College Success • Financial aid office can play a big part • Bridge Programs and the Financial Aid Office • Goals: • Raising aspirations • Navigating the admissions/financial aid processes • Easing the transition during the first year

22. Examining Policies And Plans With Dynamics In Mind • Consider whether policies are well designed to achieve their intended effects • Adopt policies that maximize net positive effects on key objectives • Design policies that minimize negative effects on key objectives • Adopt a mix of policies that in combination produce positive effects Western Interstate Commission for Higher Education. (2007) Strategies for Improving Student Success in Postsecondary Education

23. Justin Draeger – National Association of Student Financial Aid Administrators

24. Student / School Relationships • Seller Questionnaire: Please answer the following questions: How much would you sell your $2,500 car for to the following people? • How much to a nasty neighbor? • How much to a stranger? • How much to a friend? • How much to a brother or sister that needed it?

25. Student / School Relationships • When there is a relationship developed, the trading range between two people, two organizations, or an organization and a person increases. No Trade Trade Trade

26. Justin Draeger – National Association of Student Financial Aid Administrators

27. Justin Draeger – National Association of Student Financial Aid Administrators

28. The Student Transition • Random Exploration • Transition Phase • Establishment Phase • New Beginning Phase • Focused Exploration • Tentative Choices • Commitment Mary Stuart Hunter, James S. Gahagan, & Molly A. Schaller

29. How is the Relationship? • NASFAA found that 51 percent of FAOs are tracking customer relationships • 54 percent of institutions have mechanisms to do so