Strategic Issues in Financial Aid: Impacting your Enrollment Management Strategy

1. Strategic Issues in Financial Aid: Impacting your Enrollment Management Strategy Independent Schools of Northern New England Spring Meeting April 12, 2012 Kristen Power Northeast Regional Director, SSS By NAIS power@nais.org

2. Strategic Issues Overview Financial aid involves more families than ever before Managing financial aid strategically forces key questions: • Who are we serving with our aid programs? • How does our aid program balance Access vs. Affordability? • How are our aid programs evolving? How can we best equip our schools to manage the evolving nature of financial aid realities?

3. Trend Overview Tuition Growth outpacing income growth Aid for high income families increasing High Income families getting comfortable with aid Conflicting priorities access versus affordability

4. Tuition Growth Outpaces Income Growth • Tuition increases over the past 20 years average 5.7% per year • Income increases over the past 20 years average 1.16% per year • Discretionary income is squeezed • Admission implications

5. Tuition Growth and Inflation (day) Tuition Information Source: NAIS StatsOnline. Data represented here is not based on a statistical core sample.  Each year’s data may reflect a different set of schools providing that data.

6. Tuition Growth and Inflation (boarding) Tuition Information Source: NAIS StatsOnline. Data represented here is not based on a statistical core sample.  Each year’s data may reflect a different set of schools providing that data.

7. Gallon of Milk Tuition Information Source: NAIS StatsOnline. Data represented here is not based on a statistical core sample.  Each year’s data may reflect a different set of schools providing that data. Milk Data: Bureau of Labor Statistics

8. Income and Tuition Growth (boarding) Tuition is 15% of income Tuition is 10% of income Tuition Information Source: NAIS StatsOnline. Data represented here is not based on a statistical core sample.  Each year’s data may reflect a different set of schools providing that data. Income Information Source: U.S. Census

9. Discretionary Income Squeeze (day) 55% 47% 42% Tuition Information Source: NAIS StatsOnline. Data represented here is not based on a statistical core sample.  Each year’s data may reflect a different set of schools providing that data. Income Information Source: U.S. Census

10. Affordability Range (boarding) 2012-13 SSS Methodology Assumptions: Family of four from DC, two parents, two children, one in a tuition-charging school, parents age 45, both work, one earns $25K, COLA = 1.000 Source: SSS By NAIS

11. Affordability Range (day) 2012-13 SSS Methodology Assumptions: Family of four, two parents, two children, one in a tuition-charging school, parents age 45, both work, one earns $25K, COLA = 1.000 Source: SSS By NAIS

12. Possible Implications of Tuition Growth outpacing Income Growth • Increased financial need of applicant/student pool • Need for larger financial aid budgets • Financial aid priorities shifting from access to affordability • Dips in income expose more families to financial aid • Admission priorities shifting from need-blind to need-aware

13. % of Filers Range of Total Family Income Increased Financial Need Source: SSS By NAIS. Data represented here is not based on a statistical core sample.  Each year’s data may reflect a different set of schools providing that data.

14. Financial Aid Budget Increases (boarding) 110% increase in 10 years Source: NAIS StatsOnline. Data represented here is not based on a statistical core sample.  Each year’s data may reflect a different set of schools providing that data.

15. Financial Aid Budget Increases 138% increase in 10 years Source: NAIS StatsOnline. Data represented here is not based on a statistical core sample.  Each year’s data may reflect a different set of schools providing that data.

16. Tuition Discount Rate Source: NAIS StatsOnline. Data represented here is not based on a statistical core sample.  Each year’s data may reflect a different set of schools providing that data.

17. Access or Affordability Example: DC-area day school

18. Need-based and Merit Aid Pre-recession Source: NAIS StatsOnline. Data represented here is not based on a statistical core sample.  Each year’s data may reflect a different set of schools providing that data.

19. From Parent Entitlement and Post-Recession Demand Webinar available at SSS Knowledge Center

20. Pressure on Admission Office to be Need-Aware • Spike in financial aid applications for higher income families • More financial aid recipients • Smaller financial aid awards • Increased merit awards

21. Strategic Financial Aid Questions for your leadership team • Look at the financial aid data at your school. Are your trends similar to the national averages? Are you prepared for the implications of the trends: short and long term? • Check your tuition increases and income in your area: are you affordable for your population? • What is the mission of your financial aid program? • Chart your schools financial aid awards over the past 5, 10, 15, 20 years. • Are your awards supporting that mission? • How are you using merit aid? • Is financial need taken into account in admission? Should it be?

22. Contact Information Kristen Power Northeast Regional Director, School and Student Services National Association of Independent Schools (202) 973-9759 power@nais.org