Reassessing our Financial Aid Policies due to COVID

ABOUT THIS EPISODE

Dr. Phillip Levine, Professor of Economics at Wellesley College, and Founder of MyinTuition joined the podcast to talk about where our institutions are at financially right now, and why we need to reassess our aid policies and packages heading into next year in order to ensure we still have an access story for our lower- and middle-income students and families.

Between lost revenues from the board,reduced enrollment teaching, modifications, testing on certain statesubsidies for public institutions and other reasons, it's going to be a verytough year, Ihad for colleges, financially you're. Listening to enrollment growth,university from helic education, the best professional development podcastfor higher education leaders looking to grow in Roman at their college oruniversity, whether you're looking for fresh andromant growth techniques andstrategies or tools and resources, you've come to the right place. Let'sget into the show, welcome back to enromant growthuniversity, a proud member of the connect Edu podcast network, I'm EricWalson with helics education and were here to day with Doctor Phillip Lebin,professor of Economics, at Welsley college and founder of my intuition.Phil. Welcome to the show Ghd to be here so excited talk you today aboutwhy institutions may need to reassess...

...their financial aid policies because ofcovid before we dig into that. Can you give the listeners a little bit betterunderstanding of both Wellsley college and your role there sure so IV Ben aprofessor at weas to college, for this? Is My thirtiet ther there? It's aliberal arts, college and Wellsy Massachusetts. I Ben Teaching Economicsthe entire ef time en now. A few years ago, I found a a non pacousorganization called my intuition. Corp role is to provide a very simplefinancial eid. estimator wich students can use peive cost and we make itavailable to colleges in universities. Those calculations as we're going todiscuss, make it trickier an tricker fail to kick us off today remind uswhere many institutions are currently at today, financially because of covidand the covid recession. Sure I don't think we really know the extent of thedamage yet from our current environment. But it's pretty clear. It's going to besubstantial between lost revenues from...

...e board. We doce enrollment teaching,modifications, testing on certain state subsidies for public institutions andother reasons. It's going to be a very tough year ahead for collegesfinancially. Why do you believe many institutions will need to reassesstheir overall financial aid policies heading to next year, so colleges are on a difficult positionhere. At the same time, the Feir evenue is down they're, also operating anenvironment, significant economic weakness and anxiety. It affects theicurren perspective, Sudents efordability is going to be huge issuenext year and probably after that, as well, and the realities Ar Pricing andhigher education today are not going to help. There's three points. I thinkthat important to make here first very few- students PA it te PRICEANinstitutions charge. The second issue is that, despite the fact that mostpeople don't pay the sickerprice, mostly that's the number that peopleknow a and so that's a problem, because...

...they think that what they're going tohave to pay as much better than actually whut they are going to have toTay and that even aft the thing is: Thou even Aftera gasting forFinanciallik prices for lower and come students can often be too hot both fornext year Ando coming years. We need to address these issues if wo're going toaddress concerns regarding afordability yeah, and you do think that it is ourlow income students that are the most likely to fall through the crackswithout these kind of broader changes to our ETHA policies. Well, I would saythat it's both lower and motery income students- I mean these are the familiesthat always bear at the prontof an economic crisis, and this one is nodifferent. It's going to be quite sometime before the labor marketimproves to Thi fight work. These families finances will recover and theprice thing issues that I addressed earlier. They cirectly affect thesefamilies. We have to find ways to better communicate, actual pricing, notthe sicker price, and we have to find...

...ways to at least falt the line and whatthese families really need to pay. Orten College we've seen a lot ofreally creative well intentioned test pilots from other institutions over thelast several years, aimed at increasing access and financial access to lowincome students. Is there any learnings that we can? You know, learn from thecurve of these other institutions. Sure I want to be clear about this. There'sa lot of factors, THAs that stand in the layof access to college for Lowerand Com students. It's not a simple process and there's many hurtles tothes students fase along the way, lack of information about financial, a andwhat students will really pay. Definitely matter, though, itdefinitely is part of the problem, and we know that from well designedresearch studies, so I'm oneof MES so sayy involved a true Famy, a treatmentgroup, a control group wandom assignment between the two groups,participants for high school students with annual family incomes below sixtythosand dollars in the state of...

Michigan, those in the TREATN. The grupwere told that they could attend the University of Michigan tuition free. Itwas called Ha House scholarship and just you know, for point of reference.HALSCO AL name comes from the Michigan Flight Song. The thing is is that thesetudests could have attended Michigan tuition free anytime, not just becauseit's this exparment. So let's say that that UST for the sake of argument, mySaytito, a Michigan sticker crisis, thirty sand, Ollar, half of Thatis,tolition and half of that as room anbort tuition free, is just thetuition part the fifteenzand dollars. They would still owe Fifteensen dolarto attend the University of Michigan. In fact, Michigan's regular financialat policy is actually more generous than that you probably it would have totay less than the fifteen sand. Dollar O tend the University of Michigan. Ifyou were a loough income, the experiment wasn't about lowering theprice. The price wasn't cut for these...

...students. It was just doing a betterjob of communicating fordability and what the results of this experimentshowis very impressive. The Students Ho received this offware were considerablymore likely to apply and Inwal to the University of Michigan InformationMatters. So it's exciting to know that we might have some potential nudgesolutions and communication solves to help folks understand about theaffordability programs that were offering. But how do you suggestinstitutions think about funding these new, a programs, especially given therevenue issues that they're up against? For example, you mentioned stickerprice and, for example, you know. Historically, we've relied on fullpayestudents to subsidize our students who require aid. Today, those full payedstudents are harder to find, especially with the international student declinedue to Covid and other federal policies, as well intentioned as this desire foraffordability policies. How should insitutions think about this reallyreal funding issue? Let's face it.

There are no moriful pay students, inwit there and we're not going to get international students in the currentand political eenvironment to fill in that just isn't a solution. These daysat also really violates pinciples of access, if colleges, self or financialproblems, by crowding out more lower income students with with full pacesnif they were there, but they don't Ese this anyway. You know the real answer of thisquestion depends a lot on the touch of institution wou're talking about so forpublic institutions, they're, going to suffer U less and until states getfunding from the federal government. Even then, public institutions arelikely to increase ticker price, so paces will have to pay more. The trickis reduce the harm don to all students who can't afford to get siccerprised byincreasing financealway and making it Developbilin Morketas to for Lege, private institutions there'sa little bit more slack in the system. For them they can use it downmand fundsthey can borrow. Hopefully they have...

...some reserves for them. This is reallyabout delt tightening, but the current financial problems are not really asestensial, where we really see problems is for the tuition dependent privateinstitutions. Those are the places where you're really going to see placesstruggling if our current situation extends another year or two. These intoinstitutions are going to have a real problem, and, to be quite honest, soreally there are just no easy solutions. There feel really really helpful if nothard to hear stuff any next EPS advice for institutions. Listening feverishlyhad been scrambling to make sure that we had some sort of fall offerings offour students, but now buckling in thinking about what their financial atepolicies need to look like next year and evolve into next year. Where shouldthey start? I understand that thereare important financial credit constraintsfacing these institutions right now, but felling seas affects th the bottomline as well in our current ACODOMIC...

...environment. Providing adequate supportfor lower and modery and come students is critical to maintain interest andproviding that support doesn't help. If you don't tell anyone, schools need tomake their pricing systems more TASPA awesome thanks, geing. So much forjoining us today fill Ra Holtou attracting today's new post.Traditional learners means adopting new enromant strategies. helics educationsdata driven enterprise, wide approach to enrollment growth is uniquelyhelping colleges and universities thrive in this new education, landscapeand Helex has just published the second edition of their enrollment growthplaybook, with fifty percent brand new content on how institutions can solvetoday's most pressing enromant growth challenges download it today for freeat Helocks, Educationcom playbook you've been listening to enromentgrowth university from helicks...

...education to ensure that you never missan episode subscribe to the show in Itunes or your favorite podcast player.Thank you so much for listening until next time.

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