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By Jeff Selingo | Next

For Student Success, Mind the Gap

#5・ Mar 5, 2020

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In this week’s newsletter: The pressure is on colleges and universities to retain and graduate students. Student success has moved from the periphery of campus priorities to a central space in strategic plans.

Rather than focus all their fixes on students once they’re on campus, colleges might want to think about what they’re giving to students in financial aid before they ever arrive.

Amy Glynn

@AmyGlynn15

When talking about #studentsuccess it almost always equals academic success, but 3 million students drop out of school each year due to finances @GreggScoresby #empowered20 #empowered2020

10:31 AM - 4 Mar 2020

Before we get started, two announcements…

✈️Going to San Diego for the American Council on Education meeting later this month? If so, I hope you’ll join me Sunday, March 15, for an evening conversation about the future of the academic workforce. More details below.

👋My colleagues at Open Campus have added a new newsletter: First Gen, by Zipporah Osei. Zipporah, a journalist and senior at Northeastern University, is a first-generation college student herself. In her newsletter, she writes about the highs and lows of that experience. Sign up for First Gen here.

Photo by Suad Kamardeen on Unsplash

Mind the gap

Over the course of the next six weeks, high-school seniors who haven’t made up their mind about where to go to college in the fall will weigh their options. A considerable factor in their final decision will be what they’ll ultimately need to pay to go. The students, along with their families and counselors, will pore over the financial-aid award letters they received from colleges to determine that bottom-line price tag.

The problems with the aid letters colleges send have been well-documented. But one thing is clear: students aren’t getting the money they actually need to afford college.

The big picture: More and more colleges are gapping, and the amount they are gapping is growing.

Gapping is the difference between what a financial-aid formula says a student can afford and what’s provided in a package of scholarships, grants, loans, and work-study.
Average gap at public universities: $11,118, up 72% since 2008.
Average gap at private colleges: $16,255, up 43% since 2008.

Source: Mark Kantrowitz, publisher of Savingforcollege.com

Background: In the early 1990s, the National Association for College Admission Counseling, known as NACAC, made a significant change in its ethics code that allowed for gapping. Before then, the association required its member schools to not only admit students without regard to financial need but also promise to meet their full financial need.

When that got too expensive, the code was changed and suddenly we had the Wild West in terms of admissions and aid policies. Two approaches emerged:

Need-blind admissions, which doesn’t take into account a student’s ability pay in making decisions.
Need-aware admissions, which does factor a student’s ability to pay for college into admissions decisions.

Sounds simple enough, right? But there are so many flavors of each kind. Many schools might practice need-blind admissions because it sounds better, but then they accept students and can’t meet their full need, so they’re gapped. Other schools might practice need-blind admissions for part of their class (students with better grades and test scores, for instance, or domestic applicants) and then need-aware for the rest.

According to research by Mark Kantrowitz, a financial-aid expert and publisher of Savingforcollege.com.

82 colleges claim to meet a student’s full financial need for four years.
But just 55 of those colleges also are need-blind in admissions.

Think about this: Just 2% of 2,300 public and private nonprofit colleges in the U.S. don’t consider a student’s financial need in admissions AND meet a student’s full financial need for all four years of college.

But, but, but: There are so many ways to manipulate what families should pay and make a college look more generous than it really is. Among the levers colleges can pull:

Expected Family Contribution, or EFC. That number can come from the Free Application for Federal Student Aid (FAFSA) or the CSS Profile used by hundreds of schools. The EFC calculated by the CSS is typically higher than FAFSA because it captures the equity in a home and the net worth of family businesses.
Cost of Attendance. This includes not only tuition and room/board, but also miscellaneous expenses like books and transportation. It’s in a school’s best interest to make sure that number is as low as possible. Research has shown that sometimes the estimates are wildly off base.
Loans. Technically, parent and student loans are used to help families fill their gap, but many schools consider it aid they are “giving” the student, much like grants and scholarships.

Rachel Woolf for The New York Times

The people behind the headlines

The other thing about gapping is that financial-aid packages are sent by colleges a year at a time, even though the financial returns on the four-year degree only come if you actually finish the credential.

High-school seniors and their families might figure out how to fill their gap for the first year of college because they desperately want to go to a certain school, but often they don’t plan for years two through four.

That’s why gapping might be a bigger obstacle to student success than many colleges acknowledge.

Take Lydia Muse (on the left above, with her mother, Brandy, on the right). I met Brandy while reporting an article for the New York Times on gapping.

Lydia is at home right now in Fort Collins, Colo. She should be in the second semester of her sophomore year at the Rhode Island School of Design. But she’s taking a year off trying to figure out how to pay for the next three years of school.

The first year at RISD, Lydia Muse was left with an $18,000 gap, though the bottom-line of her FAFSA form said she shouldn’t have to pay anything (she qualifies for the maximum Pell Grant, for instance).
To pay for the first year, Brandy sold one of the family cars.
If Lydia returns, Brandy is considering downsizing and selling her house.
But that’s likely to cover only years two and three, and maybe part of four.

Reality check: Paying for four years of college has become a complex, elaborate, intricate financial game for families and too many are finding it to be a losing battle.

What do you think colleges should do to reduce or prevent gapping? Should more practice need-aware admissions? Should they move to four-year pricing models? Hit reply or drop me a note and I’ll feature some responses in a forthcoming edition.

👋Free Event at the ACE Annual Meeting in San Diego. Join me and…

Mark P. Becker, president, Georgia State University
Shirley M. Collado, president, Ithaca College, and member, Vanderbilt Board of Trust
Jennifer Wagner Davis, executive vice president and chief operating officer, University of Virginia
Dianne F. Harrison, president, California State University, Northridge

…for a discussion about the biggest talent challenges colleges and universities face in the future when it comes to their workforces. Sunday, March 15, 2020, 6:45 pm - 9:00 p.m. Register here.

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ICYMI: Pathways to the university presidency

With engineering deans recently appointed to the presidencies of University of Maryland and George Mason University, check out this 2017 study from Georgia Tech’s Center for 21st Century University’s and Deloitte’s Center for Higher Education Excellence about the evolving pathways to the modern university presidency.

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