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Ruffalo Noel Levitz Blog: Higher Education Enrollment, Student Retention, and Student Success

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You are here: Home / Archives for college affordability

5 “Must Haves” for Engaging Students About College Financing

October 31, 2018 by Wes Butterfield, Vice President, RNL Leave a Comment

The perception of college financing and affordability is a grim one, fueled by the very real rising costs of higher education, as well as media coverage of how much students and their families are borrowing. While this perception is understandable given the realities of paying for college, how do students and parents feel about the process of college financing? The debt levels they expect to take on? The award packages they receive?

Ruffalo Noel Levitz polled graduating high school seniors about their perceptions of these issues for the 2018 High School Seniors’ Perceptions of College Financing Report. While they have some critical concerns about paying for college, there were a number of results that may seem surprising considering the negative picture surrounding the cost of college:

  • Three out of four were satisfied with their aid packages.
  • Nearly nine out of 10 mostly understand the costs related to their financial aid award.
  • One in three say they will borrow $20,000 or less, and one in five do not plan to borrow at all.

However, there are still significant challenges for students regarding paying for their education, as well as challenges for institutions in awarding aid, communicating with students and their families, and ultimately bringing in their class. How can you address these challenges and create a financial aid awarding process that aligns with student expectations and positions your institution most favorably?

The full report dives into the research in depth, but there are also five key findings that can help you engage students and their parents about college financing, financial aid, and the value of a college degree.

Multichannel financial aid communication is key

Students told us that they prefer to receive communications about financial aid across a variety of channels.

College financing: Multichannel preferences

[Read more…]

Filed Under: Financial Aid Tagged With: college affordability, college financing, financial aid communictaions, perceptions report

When any college student debt is too much

February 6, 2018 by Bill Berg, Executive Consultant - Ruffalo Noel Levitz Leave a Comment

Increasing levels of college student loan debt don’t appear to be having a significant effect on enrollments. But higher debt is affecting the economy as a whole and it is having a disproportionate impact on low-income borrowers and students who attended for-profit colleges.

Thank you to Mary Piccioli for her assistance with this piece. An abbreviated version of this post originally appeared in University Business.

A story in Forbes reported on a new poll by LendUSA/WhatsGoodly where millennials said that student loan debt was a bigger threat than North Korea. Financial analyst Suze Orman wrote several years ago that student loans were the single most dangerous threat to our economy.  Just how much of a threat is increasing student debt—to higher education, to the housing market, to recent college graduates’ prosperity?

There’s no question that recent graduates are leaving college with more student loan debt.  More students are taking out loans and they’re borrowing larger amounts.  Total college student loan debt was $1.3 trillion at the end of 2016—an increase of about 170 percent from 10 years earlier, according to the Federal Reserve Bank of New York.  The average debt is now about $30,000.  It has been argued that college student loan debt is influencing job choices, home ownership and even the marriage rate.  But apocryphal stories about students owing $100,000 or more coming out of college don’t represent the reality for most borrowers.  In 2015, roughly two-thirds of student loan balances were $25,000 or less (see below).

66 percent of college student loan debt is under $25,000

66 percent of student loan borrowers have loan balanced of $25,000 or less (source: Forbes.com). Click to enlarge

Fewer than 5 percent owed more than $100,000 However, this 5 percent of borrowers accounted for 30 percent of total debt, as shown in the following chart.

30 percent of total student debt is owed by fewer than 5 percent of students who have more than $100,000 in loans.

Borrowers who owe more than $100,000 account for 30 percent of total student loan debt. Click to enlarge.

[Read more…]

Filed Under: Enrollment Management, Financial Aid Tagged With: college affordability, college costs, student debt, student loans

Three ways wise borrowing for college can benefit students

June 18, 2015 by Anne Monroe 1 Comment

While college students have to consider the amount of student loan debt they can take on, informed borrowing for college is still one of the best investments they can make.

College affordability is receiving a lot of attention from federal policy makers and the media alike. Student loan borrowing has also become an issue, much of it couched in sensational stories of individual students with huge student loan debt. As a result, students and families are approaching the prospect of borrowing for college with much trepidation and pause, and often are uninformed or ill-advised as to what borrowing may mean for their personal situations. This is where your role as an admissions and financial aid advisor is of key importance in helping a family to sift through the facts and make a decision to invest wisely in a student’s future.

When we look more closely at the issue of student loan indebtedness, very few students actually have the kind of crushing debt that has made headlines in the news. In a February 2015 survey of college-bound high school students and their parents, respondents were asked to estimate the amount of debt a student would accumulate by graduation. They responded with a mean value of $42,033. This is well above the national loan debt average of $28,400 for those obtaining bachelor’s degrees. While that is still a significant amount of debt, many college students graduate with debt levels well below that figure. A recent report for the New York Federal Reserve Bank showed that 40 percent of student borrowers have less than $10,000 in debt and 70 percent have less than $25,000 (Additionally, most parents have saved less than $10,000 for their oldest child’s education.)

Although the economic climate is still difficult for many families, one fact remains true from both politicians and researchers—supporting students to achieve higher education helps them secure gainful employment and growth positions in the workforce, which fosters individual advancement as well as collective advancement for the country as a whole.  And while there have been an increasing number of pundits and politicians questioning the value of college in an era of escalating costs, there are three reasons why informed borrowing for college is still one of the best investments students can make:

  1. Student loans help provide access to and pay for college. Student loans are part of the financial equation for a majority of students attending college – more than 70 percent of the class of 2014 graduates borrowed through student loans. The flip side, though, is what would these students have missed if they didn’t make the investment in the first place? College graduates earn more—$45,500 compared to $28,000 annually for high school grads (according to a 2014 Pew report). They are also more likely to have health insurance and retirement savings (which they will need because they also live longer).
  2. A college education is worth more today, both in earnings and job satisfaction. Not only do college grads earn more, but the negative cost of not going to college is increasing for this generation of young people. Those with just a high school diploma fare worse today than their peers from earlier generations—22 percent of millennials with only a high school diploma live in poverty compared to 12 percent of boomers who hold only high school diplomas. According to the 2014 Pew report, only 57 percent of high school grads state they have a career-track job compared to 86 percent of those with a bachelor’s degree or more.
  3. Student loans can help establish and build a credit score. Most traditional freshmen enter college with no borrowing history. They go straight from their parents’ home to the residence hall. It can be difficult for young people to get a credit card and build a positive credit history. Having good credit is important in achieving other milestones such as renting, borrowing for a car, or a home mortgage. As a form of debt, student loans are part of the credit score, and demonstrating the ability to manage recurring debts on time can go a long way to enhancing the score.

Fearing student loans alone is a poor reason for a student to base college choice upon. Our role as educators and advisors is to help students and families understand what the opportunities and risks are,  to consider the true costs associated with a college education, and to make informed decisions which relate directly to their personal family situation. The key is to ensure that students and families are borrowing knowledgeably and responsibly, making a sound college choice for those who are ready to attend.

Communicate the cost of attendance clearly, and start a cost dialog with students

Trying to understand the actual cost to attend college is difficult for many prospective students and parents. While there are cost calculators available to help them, including the one provided by the federal government, many do not factor specific institutional merit aid.

Ruffalo Noel Levitz does offer a net price calculator that can include nearly any form of merit aid from a campus, along with federal aid and loans that the student would be eligible for.  Calculators that incorporate this level of institution-specific aid make it far easier for students to assess their true cost of attending college.

It’s also important to engage students in the cost conversation early, so that they can understand the real cost as well as the real value of attending your institution. Make it easy for students to reach out with financial aid questions, and review your financial aid communications for clarity and completeness. Ask yourself: if you were a student, would you be able to follow your own aid letters?

I also am happy to discuss strategies and questions about awarding and financial aid communications. Email me and I will share what I have seen working at other campuses.

Filed Under: Financial Aid Tagged With: college affordability, student loan borrowing, student loan indebtedness, student loans

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