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Enrolling Transfers: A Matter of Service

What students arriving from community colleges expect and need
University Business, Jul 2008

AS ENROLLMENTS AT U.S. community colleges continue to grow, some four-year institutions are beginning to view community colleges as competitors. Given current concerns regarding college affordability, the lower sticker price for community colleges-combined with living at home-does provide a cost-effective alternative for the first two years of a baccalaureate education. In fact, the rate of growth at these schools is now outstripping that of all other sectors, including for-profit institutions.

The environment is ripe for two- and four-year institutions to work as partners to provide a smooth transition into a baccalaureate program for transfer students who have earned an associate degree. As competition for new freshmen gets tougher, transfers can become an important and particularly attractive enrollment stream.

Transfers fill upper division classes where seats are likely available, add maturity to the residential community if they live on campus, and put less demand on campus housing generally, among other things. With all this in mind, many four-year institutions are increasing their visibility on two-year campuses by developing separate communication streams for transfers and assigning transfer "champions" in the admissions office to focus on new strategies to attract transfer students. Interestingly, recruiting more transfers typically doesn't involve significant increases in institutional aid expenditures. In fact, enrolling more transfers can lower an institution's discount rate. Here's why:

Admissions office transfer 'champions' focus on new strategies to attract transfer students.

<b><em>Fewer alternatives.</em></b> Typically, transfer students are considering fewer options than freshmen are during the college application process. While it is not uncommon for freshmen to apply to eight or 10 different colleges, transfers typically only apply to one or two. So transfer yield rates are much higher-often more than double-than freshman yield rates at the same institution. With yield rates already high, using financial aid to increase them further can be a slippery slope; the end result typically is just lower net tuition revenue.

Consequently, institutions must use caution when introducing new financial aid initiatives to build transfer enrollments. Transfers care about affordability, yet they typically make enrollment decisions based on other factors: the credit they can "transfer in" and consequently their "time to degree," the quality of the major, the timeliness and accuracy of information (they are more sophisticated consumers), and location. Institutions that are successful in enrolling transfers have figured out what they need to do organizationally and operationally to ensure transfers feel a sense of "fit" and belonging-that they are treated as first-class citizens. Customer service and course availability are more important priorities for transfers than getting the "best deal." In short, they tend to be less price-sensitive than freshmen.

As Don Emmons, vice president for enrollment at <b>Hobart and William Smith Colleges</b> (N.Y.), explains, "Although our transfer population is small, like most liberal arts colleges, we have found them to be somewhat less price-sensitive, and therefore as a subpopulation in our overall enrollment they contribute favorably to our net tuition revenue."

<b><em>Access to more loan resources.</em></b> Higher federal loan limits for upperclass students provide additional resources for transfer students. This can reduce the demand on institutional grants when building aid packages. Administrators should develop distinct financial aid packaging strategies for new transfer students, compared to those established for freshmen, in order to take advantage of the higher self-help levels (work-study and loans) available.

At many campuses today, packaging strategies are the same for all new students, regardless of grade level, resulting in a significant missed opportunity to reallocate limited institutional grants when other resources are available.

<b><em>Less cumulative debt.</em></b> Students who have chosen to attend a community college for their first two years of a four-year degree typically will have accumulated less debt by the end of their sophomore year than those who started their education at a four-year institution. Consequently, their willingness and ability to borrow for their last two years will be greater than for students starting as freshmen.

Joe Bailey, director of Financial Aid at <b>Genesee Community College</b> (N.Y.), is an advocate of the 2+2 option for earning a bachelor's degree. "We've had many students choose GCC because of its value for the price. Most students have a plan: two years with us and two at a four-year institution."

One of Bailey's former work-study students, for example, knew she was going to be an engineer but didn't want the debt burden that attending a four-year institution provided. She lived at home while earning her associate degree at GCC and then went on to <b>Clarkson University</b> (N.Y.) for an engineering degree and finally Simon School of Business at the <b>University of Rochester</b> (N.Y.) for her MBA. Bailey adds that many students choose to begin at GCC and transfer to SUNY Geneseo for their teaching degree. "This is done in part because of the low cost of education at GCC."

Although the factors discussed above typically result in transfers being less price-sensitive than freshmen, it is still important for institutions to use historical data effectively to understand what aid strategies for transfers will produce the best results (maximize enrollments, increase net tuition revenue, meet diversity goals, etc.).

Some institutions are using sophisticated econometric techniques to shed light on the significance of an applicant's total grant in predicting enrollment. Less sophisticated tools, like table analysis, can also be used to estimate the likely impact that changes in awarding strategy have on targeted enrollment goals. The following steps describe the process for developing meaningful yield tables in order to explore the impact of total grant assistance (merit and need-based, institutional and external) on enrollment behavior.

First, segment the data on two or three ears of transfer admits into categories of transfer college GPA in order to look for breakpoints in yield at different GPA levels.

Sample data (see chart) shows that yields increase for admitted transfers with a prior college GPA below 3.25, and increase again when the GPA is below 2.50. A logical approach, therefore, would be to segment admitted transfers into three quality groups.

Analyzing the yield patterns for each quality group comes next. This can be done by examining financial need and total grant levels and determining the appropriate mount of grant assistance to offer. The point at which additional grant funds to students with similar need levels does not substantially increase yield rates provides the line where the total grant is overly generous.

On the other hand, there may be examples where additional grant funding does improve yields, indicating that in order to increase enrollment and net tuition revenue, financial aid awards should be increased. For example, at a higher cost, private institution, if yield increases from 45 percent when no grant is offered to 61 percent when $1,500 is awarded, a simple cost-benefit analysis will show that offering at least $1,500 to all admits in that quality group will improve both yield and net tuition revenue. If then the yield only improves to 64 percent when $2,500 in grant money is awarded, the additional enrolled students may actually lower the total net tuition revenue.

When financial aid strategies for transfers differ from those for freshmen, it is possible that some transfer students may have originally applied as freshmen and been offered a more generous financial aid award (especially merit awards) than they are now receiving as transfers. This will likely generate questions and in all likelihood disappointment.

It is critical, then, that verbal and written communication-including that provided on the institution's website-clearly state the criteria and amounts of all available awards. While it is not uncommon for merit-based aid to be either lower or not offered at all to transfer students, it is important that students understand what is available prior to making their enrollment decision.

Paying attention to transfer students can provide an opportunity to enroll more students with less financial aid expenditures, plus offer a more affordable option for students to earn a four-year degree with less out-of-pocket costs and a lower debt burden. It's a win-win venture.

<em>Kathy Kurz and Jim Scannell are partners in the enrollment management consulting firm Scannell & Kurz. Samantha Veeder, formerly the director of Financial Aid at Hobart and William Smith Colleges (N.Y.), is the firm's senior consultant. They can be reached via their website,</em>;

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