The connection between a student’s ability to pay for college and successfully earn a degree is well established. Federal and state grant and loan programs and institutional need-based scholarships have been the central strategy to provide access, regardless of family income, to our country’s colleges and universities for many decades.
COVID-19, however, has highlighted cracks in our public-private financial aid system. Attending college and successfully completing a degree create a financial strain that goes far beyond what our current financial aid approach can address. Our students are struggling to pay for basic needs, such as food, shelter, and child care, and our institutions are struggling to pay for expanded student support services, such as mental health counseling, that are increasingly needed to keep students on a path to degree completion.
During the March meeting of AGB’s Council for Student Success, the conversation focused on how student financial need is impacting student success and what actions boards might consider to address these gaps as a central component of their student success strategies, especially where they intersect with efforts to address diversity, equity, and inclusion. The conversation drew the following insights.
Balancing competing priorities
Governing boards are experiencing significant tensions and competing priorities as they work to both maintain affordability for students and manage the financial sustainability of their institutions. On one side, the costs of providing high-impact experiences and student support programs and the demand for additional institutional financial aid and emergency funds are increasing. On the other, the pressure to maintain, or even lower, current tuition levels and maintain healthy endowments puts limits on institutions’ ability to generate the revenue necessary to offset those costs.
Addressing these tensions and improving student success will require governing boards to step back and ask critical questions about reconsidering their current institutional policies and approaches to student financial support.
Rethinking Total Cost of Attendance
One important question for boards to ask is how their institutions calculate the total cost of attendance (COA). The federal government provides guidance on how the COA is determined, but institutions have some latitude in what is included. An institution’s published COA is important because it is used to determine the maximum amount of aid available to students. To assure that students have access to the necessary amount of financial aid to fund their education, boards should be asking:
- How is the COA for our institution calculated? Does it accurately represent how much it actually costs for a student to successfully complete their education?
- What parts of our institution’s educational experience does our published COA cover and what does it leave out? Are our institution’s signature educational experiences or high-impact practices included or are they extra, resulting in two different educational experiences—one for those who can pay and one for those who cannot.
- What are the important considerations in publishing a more extensive COA, including how the public perceives an institution’s cost and how the institution can effectively communicate the role of financial aid in making college affordable for all students?
ROI of Student Success
Boards need to understand the financial impact of not investing in student success. Research consistently demonstrates that policies and practices that improve retention and persistence also have a significant financial return for institutions. At one institution, the board and president partnered to change their unpaid balance hold policy. The old policy placed a registration hold on a student with an unpaid balance of more than $200. The university completed a financial analysis showing that for every 100 student holds removed, the institution gained more than $1 million in tuition revenue. The new policy resulted in both better student success outcomes and financial outcomes for the university.
Boards need to reconsider how their institutions analyze student success initiatives and financial aid strategies—not as additional costs but as investments in student success that have long-term financial impact. Boards should be asking:
- What data and financial analysis has been completed to understand the student success and financial impact of existing institutional policies?
- What is the potential return on investment from adjusting those policies and practices with an orientation toward student success?
- What is the true cost of a student not returning to the institution, and what is the financial impact beyond the institution—on the student, community, region, and society?
Student financial needs change more frequently than once a year.
Our traditional practice of annual financial aid determination no longer reflects the lived experience of many of our students—especially our most vulnerable populations. Institutions may need to rethink their approach to financial aid, including the availability of short-term or emergency aid and the roles of foundations in providing more flexible, real-time support, including funds to support academic experiences and non-academic needs.
Student success is relevant to all board committees.
Improving equitable student success is a complex issue that will require the rethinking of many of our institutional policies and practices. Equitable student success should be orienting the discussions of all board committees—not just the student affairs committee. For example, legal and risk tolerance are important responsibilities of boards. The audit committee could analyze multiple ways to mitigate risk related to changes in policy or practice and identify those with the most promising ability to positively impact student success.
AGB will continue focusing on key topics related to board governance and student success, including how to define and measure student success and what mindset or attitude shifts need may need to occur to support equitable student success at our institutions. We are grateful for the support of our Council for Student Success members in spearheading these discussions.
Thank you to AGB Sustaining Partner AT&T for its support of this council.
Lisa Foss, PhD, is the ambassador to AGB’s Council for Student Success and a senior consultant at AGB.
Opinions expressed in AGB blogs are those of the authors and not necessarily those of the institutions that employ them or of AGB.