Hanover Research
SERVICES
OVERVIEW
Solutions for Manufacturing
Cost and Aid Strategies:
How to Maximize Results for Your Institution
May 8th, 2013
2:00 EDT
Cost and Aid Strategies: How to Maximize Results for Your Institution
Introduction
Questions: Please use the Q&A pod located at the bottom of your screen
Audio: Participants can choose to use the microphone and speaker capabilities
through their computer or phone. Please call into the telephone conference
line if you’d like to use the audio through your phone.
+(877) 273-4202; Access Code: 4705008
Audio problems: Please email [email protected]
or call (434) 220-1687.
Recording: All webinar registrants will be emailed a link to access the recorded
webinar and additional materials.
Cost and Aid Strategies: How to Maximize Results for Your Institution
Outline
During today’s webinar, we will cover the following topics:
 A discussion of tools such as tools such as tuition cost sensitivity, net
cost sensitivity, and tuition discounting benchmarking
 Presenter: Dr. Harry Hellenbrand, California State University- Northridge
 Presenter: Mr. Game Quan, Claremont School of Theology
 Q&A
Cost and Aid Strategies: How to Maximize Results for Your Institution
Introduction to Tuition Discounting and Other Aid
Trends





Tuition elasticity
Definition of tuition discounting
The use of tuition discounting in higher education
Advantages and disadvantages of tuition discounting
Tools to use to develop a tuition discounting strategy
Cost and Aid Strategies: How to Maximize Results for Your Institution
Tuition Elasticity
 Tuition Elasticity Formula
 Higher education tuition is relatively inelastic
 Importance for higher education institutions to measure tuition
elasticity correctly
Cost and Aid Strategies: How to Maximize Results for Your Institution
Definition of Tuition Discounting
 The Chronicle of Higher Education defines tuition discounting as:

“The difference between what students are actually paying to attend an
institution and its sticker price.”
Cost and Aid Strategies: How to Maximize Results for Your Institution
Common Aid Strategies in Practice









Tuition freezes
Tuition reduction
Tuition elimination
Fixed tuition guarantee
Replacing loans with grants
Public university price matching
Fast-track degree programs
Job guarantee
Four year graduation guarantee
Cost and Aid Strategies: How to Maximize Results for Your Institution
Advantages of Tuition Discounting
 Allows private colleges to address student need
 Increases student diversity
 Increases enrollment
Cost and Aid Strategies: How to Maximize Results for Your Institution
Consequences of Tuition Discounting
 Reduces student accessibility and affordability
 Shifts funds from instructional and student services
 Increases financial risk exposure for smaller institutions
Cost and Aid Strategies: How to Maximize Results for Your Institution
Comparing Tuition Cutting to Tuition Discounting
 Some institutions are choosing to lower both the discount rate they
provide to students and the “sticker price” for full tuition and fees.
 Though the overall revenues should remain the same, the primary issue
of concern in this scenario is whether an institution which lowers its
tuition will be perceived as less prestigious or of lower quality by
prospective students
Cost and Aid Strategies: How to Maximize Results for Your Institution
Tools to Use to Develop a Tuition Discounting Strategy
 Determining when to lower the sticker price



The institution needs to be significantly under enrollment goals
Will work best when most students are receiving institutional grant aid
at or in excess of the amount of the planned tuition discount
When reducing aid for a specific sub-population, the subpopulation
should be a large group though your institution currently enrolls only a
small “share” of that population
 Determine price elasticity
Cost and Aid Strategies: How to Maximize Results for Your Institution
Presenter
 Dr. Harry Hellenbrand, Provost and Vice President for Academic Affairs
at California State University-Northridge
Cost and Aid Strategies: How to Maximize Results for Your Institution
Presenter
 Mr. Game Quan, Vice President For Business Affairs And Chief Financial
Officer at Claremont School of Theology
Cost and Aid Strategies: How to Maximize Results for Your Institution
A Failed Proposal to Reduce Tuition Rates
Gamward C. Quan
Vice President for Business Affairs
Chief Financial Officer
Claremont School of Theology
May 2013
Cost and Aid Strategies: How to Maximize Results for Your Institution
Current National Situation
 President Obama in the 2012 State of the Union Address Called Out the
Crisis in Student Costs in Higher Education



High Tuition Costs
Rising Student Debt
Economic Return (Jobs)
 Shift of Federal Student Support to Undergraduate Education
 Total Student Debt Exceeds Total Credit Card Debt
Cost and Aid Strategies: How to Maximize Results for Your Institution
The CST Situation
 Emphasis on Full-Time, Bricks-and-Mortar Programs
 Tuition Rate Increases Have Outpaced the Growth of the Scholarship
Endowment
 High Tuition + High Discount (Scholarships) is not Manageable without a
Paying Student Population
 This is an Unsustainable Model
Cost and Aid Strategies: How to Maximize Results for Your Institution
Crisis for Students
 Higher Levels of Undergraduate Student Debt
 Already in Default on Prior Undergraduate and Graduate Student Debt
 Students Borrow More Than Direct Education Cost to Cover Living
Expenses
 Bricks-and-Mortar Programs Require Relocation
 Full-Time Programs Limit Employment Opportunities
Cost and Aid Strategies: How to Maximize Results for Your Institution
(Failed) Proposal: Reduce the Gross Tuition Rate
 Eliminate the Artifice of Tuition Discounting
 Prospective Students Will Immediately Understand the Cost of
Attending CST (no waiting for scholarship offer to determine “real” cost)
 Reduces Student Borrowing
 Allows Scholarship Cash to Buy More Tuition Units
 Increases Transparency for the Student
Cost and Aid Strategies: How to Maximize Results for Your Institution
The Reality
 Students Expect to Receive Scholarships


Scholarships are Honors They Earn
Expect Custom, Flexible Pricing Based on Individual Needs and
Requirements
 Donors Like to Give Scholarships
 Tuition Price is an Indicator of Quality
 The Few Schools that Did Attempt Gross Tuition Reduction Abandoned
Their Experiments within a Very Few Years due to Competition
Cost and Aid Strategies: How to Maximize Results for Your Institution
Actions
 It is Evident that Tomorrow’s Students Will Need to Work While in School
 Support a Paying Student Population




More Part-Time Students
More Distance Students
More Online Students
Non-Traditional Schedules
 Communication with Fundraising Staff that Unrestricted Gifts are Preferred
Over Scholarship Gifts


Due to Our 35% Tuition Discounting Cap, Additional Scholarship Dollars
Cannot be Spent Without More Students
Scholarships are Often Restricted, Limiting Their Availability and
Effectiveness in Forming the Incoming Class to Current Programs
Cost and Aid Strategies: How to Maximize Results for Your Institution
Q&A
Testing Adobe Connect with Hanover Staff
Thank You
 Thank you for participating in this Hanover Research webinar. A link to
the recording of this webinar will be emailed to you.