Packaging Theory:
The How, When and To Whom
Behind Creating a Packaging
Procedure
• Michele Kosboth – Director of Student
Financial Planning, Lasell College
• Daniel T. Barkowitz, Director of Student
Financial Aid, MIT
State of Diffusion:
Defining Student Aid in an Era of Multiple Purposes
(available at www.ihep.com)
• Encouraging access and
•
•
•
•
choice for qualified needy
students.
Furthering persistence
toward a degree.
Promoting affordability
for lower-income students.
Promoting affordability
for middle-income
students.
Rewarding student
scholarship/merit.
• Targeting specific groups
and priorities.
• Improving institutional
financial aid
administrative
accountability.
• Managing institutional
enrollment.
• Redistributing state
taxpayer revenue.
In an era of increasing demand…
• How do you distribute
the supply?
• Today’s Agenda
– Types of Aid Packaging
– Understanding
Preferencing
– The % Method
– Where do we go from
Here?
Purpose of financial aid
• Vision
– Does the college have
a vision?
– Is Aid as a part of it?
– Do you have a
personal bias?
Need vs. Merit Aid:
• Need-Based
– Pros and Cons
• Merit-Based
– Pros and Cons
Merit within Need
• AKA Preferencing
– Using some other
measure to rank
students and then
prioritizing package
based on that measure.
– Examples:
• Admissions rank
• Major
• Likelihood of enrolling
Preferencing – Your Goals
• Equity and Access
• Recruitment driven
–
–
–
–
Just make the class?
Improve the academic profile?
Improve enrollment in a program or major?
Improve enrollment among a cohort group?
• Reward driven
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–
–
–
Honors
Community Service
Leadership
Athletics (NCAA allowed?)
What do You Have to Work With?
• What is your discount rate?
– Definition (institutional grant aid / total
tuition [+ room and board?] revenue).
– Do you know this number?
– What has it been historically?
– Where is your competition?
– What can you afford?
• Enrollment.
– What size is optimum? Where are you
now?
– Resident vs. Commuter blend.
How will you operate?
• Full need?
– Private schools only?
– Which need?
• Solving the IM/FM issue.
– For all populations?
– Gap?
• Maximum Eligibility?
– Public or low grant schools only?
– Package by date?
– Limited funds – give what you can?
• Limit on grant?
• Gap?
– Rationing of funds?
Another strategy
• Percent of need met by
(institutional) grant.
– Studies indicate that when
comparing packages parents
focus on the grant amount.
• Can you predict enrollment
based on %age of need met
by grant
– Case example: Lasell College
• Add bonus for desirable
traits.
Example of how this works
% Need
Met
# of Cases Enrolled Didn't enroll Yield
70% 75%
20
10
10 50.00%
65% 70%
25
15
10 60.00%
60% 65%
120
73
47 60.83%
55% 60%
110
54
56 49.09%
50% 55%
90
30
60 33.33%
45% 50%
80
23
57 28.75%
40% 45%
30
7
23 23.33%
35% 40%
10
2
8 20.00%
30% 35%
5
1
4 20.00%
25% 30%
2
0
2
0.00%
20% 25%
1
1
0 100.00%
15% 20%
1
0
1
0.00%
10% 15%
0
0
0
0.00%
5% 10%
0
0
0
0.00%
0% 5%
0
0
0
0.00%
What will you do in future years?
• “Grandparent” to first
year amount (dollars)?
• Use the same % of
new need?
• A whole new
calculation?
• Consider academic
performance of 1st
year(s)?
What other strategies?
• % of remaining need
(after self-help and
gap) with grant.
– Pros / cons.
• Fixed gap (based on
populations?).
• Other models?
Test, try, and improve
• Write out the logic.
• Try modeling any
changes on this year’s
population to measure
impact.
• Keep in mind your
goals.
• Simulate packaging
before you deploy!
Wrap Up.
•
•
•
•
Thanks!
Evaluation.
Any last questions or comments?
Contact us:
Daniel Barkowitz
[email protected]
(617) 258-5612
Michele Kosboth
[email protected]
(617) 243-2378