WITHOUT FINANCIAL AID SOFTWARE and a crack administrative IT team on hand, Nancy Hoover might just be hiding under her desk. The economic downturn has cranked up the pressure on the financial aid office at Denison University (Ohio), which Hoover oversees as director of financial aid and student employment. “We are hearing anxiety and concern from parents of prospective students as well as from parents of currently enrolled students,” she says. “We remind them that Denison is committed to trying to make [our education] affordable to the extent we can.”
Hoover attributes her office’s success to the technology. “We can monitor, we can quality check, we can avoid delays. When we get things here we can process them quickly. It’s also about making sure we are in compliance,” she explains.
A private institution of 2,100 full-time students, Denison has a financial aid staff of five and processes packages for the majority of the 4,500 FAFSA applications received each year. The office uses SunGard Higher Education’s Banner Financial Aid module, as well as the Banner self-service component for student use, the Banner Document Management Suite, or BDMS, and the U.S. Department of Education’s DL Tools for Direct Loans.
If the current economic downturn has Hoover and her team thankful for financial aid software, they are in good company. Last year, colleges and universities experienced the largest drop in endowment values since the 1970s. Endowments dropped in value by an average of 3 percent for the 2008 fiscal year and an estimated 22.5 percent in the five months after that, according to reports from NACUBO and TIAA-CREF Asset Management.
Meanwhile, the number of FAFSA applications filed for 2008-2009 increased by 10.5 percent over the prior year, according to Mark Kantrowitz, publisher of the financial aid website FinAid. In a National Association of Independent Colleges and Universities survey conducted last November and December, 69.2 percent of respondents said student/parent loan availability has been affected by the downturn, and 82.2 percent said demand for aid has been affected. Adding to the intensity, Congress has passed significant legislation affecting financial aid, including the American Recovery and Reinvestment Act of 2009.
All of these trends mean that financial aid offices are under pressure to meet student and family needs comprehensively and quickly. How can software calm jittery student nerves and strengthen service? By enabling staff to have productive meetings with students, giving students and families continuous and interactive information access, allowing staff to track and report on data, and ensuring that audits?which are both time-consuming and critical?are clean.
If ever there was a time when the term “high tech, high touch” was relevant, this is it. Software frees financial aid staff to focus on service and give students a sense of stability throughout the aid process. Critical communication and accurate information are especially needed now, says Dave Curran, a principal functional consultant for Banner Financial Aid at SunGard Higher Education.
At the University of Idaho, which participates in the federal Direct Loan Program and utilizes Banner Financial Aid, staff can pull up a student’s FAFSA, analyze aid options, and offer a package on the spot. A student’s financial circumstances can change quickly due to income losses, making such quick turnaround even more crucial.
“If a parent loses a job, we can adjust their information and repackage it right there [through the system], so that student and parent can walk out of the office knowing what’s available to them and actually have their funds disbursed to them,” says Dan Davenport, UI’s director of admissions and financial aid. “At a time when students and their parents are stressed out, that is a huge advantage.”
In-person meetings are buttressed by student self-service options. At Johnson County Community College (Kan.), the financial aid office uses Banner and is adding an online forms solution from Axiom (which JCCC plans to put into place this year) to give students comprehensive information online. “We have a huge commuter population, and we have off-site campuses,” says Chris Christensen, director of financial aid. While Christensen and his staff welcome office visits, online self-service enables students to complete the aid process from home. “With the economic downturn, we need to go to them,” he explains.
Kantrowitz of FinAid says such capabilities have changed the face of financial aid. “You can have students logging in to your system to read their award letters or complete documentation at their convenience, not yours.”
A smooth, speedy fund disbursement process is another piece of the student service puzzle, and outsourcing that process is one way to make it happen. For example, implementing Higher One’s One-Disburse Refund Management service, which allows students to choose how they receive their refunds, can “free employee resources to focus on other more critical functions that serve the campus,” says Casey McGuane, senior vice president and chief services officer of the financial services and payment company. Clients have shared that their lines of students have disappeared and phone calls have decreased. McGuane adds that with no more checks to mail, cost savings are immediate and students receive refunds faster.
Administrative solutions provider Campus Management wanted to know exactly how students felt about the online application and financial aid experience. So the company set out to compile information on more than 3,500 interactions that students experienced with institutions through blogs, FAQ pages, and video testimonials as well as interviews with current students.
According to Jason Roberts, the company’s senior vice president and chief strategy officer, when students were in the “shopping stage” (the marketing component of the college application process), they were seeking inspiration. But “as soon as they passed into financial aid, the need for inspiration declined and guidance was the number one need,” Roberts says. Institutions “have the marketing piece down. ... Then when you go on to the financial aid page, there’s usually one innocuous paragraph about how they’re going to help you, and you may be eligible for grants and loans, but it doesn’t get down to details. We believe you have to be very forthright with today’s students.”
Transparency has always been important to Generation Next, but with the economy in crisis it is even more so. Software now enables institutions to customize the electronic messages and information they send to and request from students. Campus Management’s new solution, called Project Springboard, gives prospective students who are visiting a college’s website information about the financial aid process and calculates estimated eligibility for funds before the student applies. (On the back end of the solution is a robust engine that allows institutions to fill in all of their rules for awarding aid.)
The latest version of SunGard’s Banner Self-Service allows aid administrators to tailor messages for students, considering variables such as how cleanly a FAFSA was completed or whether the institution verifies each and every FAFSA, or just some of them. “The student can go online to tell the financial aid office about any outside resources or things they want the financial aid office to know about, and the office can update the records instantly online,” says Curran. “It really opens up the door to transparency and helps let the student know where they are in the process at any given time.”
“Navigating the financial aid process can be scary and confusing for many parents and students,” says Kim Lowery, senior financial aid consultant for Datatel. Institutions have a variety of vehicles available to them for effective student communication, she says, noting e-mail, text messaging, targeted messaging through the institution’s main portal, and access to individualized financial aid information online. Datatel’s Communications Management feature provides student-specific communications, while the company’s ActiveCampus Portal allows students to interact with their individual financial aid process online.
Some aid offices use web-based software-as-a-service (SaaS) to optimize functions. (Unlike traditional solutions, SaaS is offered for an annual subscription.) The Regent Enterprise solution from Regent Education, for one, can be embedded into a school’s main student portal. Students can click on a link and go on to complete steps of the financial aid process. “For the student, it becomes a major customer satisfaction enabler,” says Michael Ratti, Regent’s CEO.
The Tepper School of Business at Carnegie Mellon University (Pa.) signed up for the Regent solution as a way “to implement a critical application with strong security protocols in a condensed time frame,” says Executive Director of Finance Ted Curran.
Institutions need solid data to meet goals and put together the best possible aid packages. “A question for top financial aid administrators is whether financial aid software systems will provide them with both a high-level strategic and comprehensive view of their data,” says Mary Lynn Kudey, senior manager for SMART Business Advisory and Consulting. “We have seen many institutions with too many reports and not enough information. The data is in the system, but the challenge is identifying and specifying the report requirements to meet the needs of trustees and the administration.”
To be useful, reporting functions of software solutions must be reliable and flexible, notes Lowery of Datatel. “Financial aid staff cannot wait for days to have their technical staff assist with report writing,” she says. They need to retrieve accurate data on demand.
Software helps in making accurate enrollment and aid projections?particularly important at a time of limited budgets. “Our early predictions based on our applicant pool have to be right, both with the number of individuals and the costs to bring these individuals into the school,” says Mike Johnson, director of institutional research at Dickinson College (Pa.), which serves about 2,350 students. With a finite amount of aid, they try to maximize quality, accessibility, and diversity while also trying to maximize the net tuition revenue. Analytical solutions from Rapid Insight help Dickinson leaders make annual enrollment and aid projections. “Schools are using our software to understand how a change in the amount of financial aid offered to a student, given all their attributes?their SAT scores, where they are from, their GPA?[will] affect their likelihood of enrolling,” says Michael Laracy, Rapid Insight’s CEO.
Administrators can now determine need according to federal or institutional methodologies (or both) and use that information to compile aid packages automatically using school-specific rules, known as algorithmic, or automated, packaging. In the past, aid packages were either compiled manually or based upon generic gap, self-help, or equity awarding formats. “Algorithmic packaging takes that analysis of need and then applies it to specific funds and award amounts,” says Curran of SunGard.
Software is transforming the entire financial aid process so students can get accurate information quickly and clearly. Kantrowitz of FinAid says institutions should develop ways to measure ROI from software and gauge user satisfaction. “You can do some measurable outcomes, such as the number of students using the service, the time they spend on it, the number of activities that they take care of through it. You can also have automated exit surveys to find out what people like and don’t like.”
With such information in hand, financial aid administrators can feel confident that the software options they choose are doing what they’re meant to do: Give stressed out students and families as much access, transparency, and support as possible.
Caryn Meyers Fliegler is a former editor at University Business.