Why do students fail to attend their top-choice colleges?
In a word, money.
Royall & Company has confirmed what enrollment leaders have suspected since the Great Recession of 2008-10: Cost is the leading determinant in students’ college choice. It turns out, in fact, that concern about cost is the number one reason why students forgo their top-pick schools.
We analyzed the deposit activity of 54,810 students who were admitted to the 2016 class at of one of 92 Royall partner schools, based on our Deposit IQ yield intelligence program. Eleven percent—over 6,000 students—said “no” to their first-choice institution, and 40% of those who declined their dream school cited price-related concerns as the reason. The bottom line? Cost of attendance, perceived value, financial aid, and merit-based scholarships can keep students from committing to their top-choice college.
This level of financial concern is strikingly consistent across SAT performance, minority status, and wealth. Forty percent of students with SAT scores greater than 1200 and 39% of students with scores below 1200 forwent their first-choice schools because of cost-related concerns. Similarly, 43% of minority students, 39% of non-minority students, and 40% of students from high-income families cited financial worry as their reason for declining admission to their preferred institution.
Mitigate attrition with cost transparency
For many of these students, an element of financial surprise played a role in their decision making. Our data suggests a prevalence of misunderstanding about cost that, when rectified, prompted some students to downgrade their deposit plans. Thirty percent of students discovered that their top-choice school was more expensive than they expected, and almost half of those students decided not to attend for cost-related reasons.
This finding underscores the importance of educating prospective students on college costs, in general and in their particular circumstances. That’s why we work with many of our clients to craft what we call “affordability marketing campaigns” to address students’ financial concerns early and consistently, and we encourage the enrollment leaders we work with to proactively partner with prospective students to communicate about finances throughout the admission cycle.
How do students really feel about affordability? Here's what they told us.
Contrary to the image of sticker-shocked parents who urge their kids to limit their college preferences to lowest-cost options, I have found that parents are often great interpreters of financial concerns for their kids and sometimes strong allies for their first-choice—and sometimes pricier—programs. In my experience, parents are more likely to recognize and embrace the long-term benefits of a top-choice school over, for example, more immediate perks like a slightly better financial aid package at a lower choice institution.
Communicate your ROE (return on education)
Underlying these financial conversations is a growing demand for a quantifiable and provable “return on education.” Just as businesses expect proof—or at least precedent—that a service they are purchasing will yield dividends (the return on investment), today’s students and families are increasingly demanding dividends for the time and money they will invest in college.
Enrollment teams must be prepared to provide that proof, emphasizing the enduring value of their education, both intellectual and financial.
One of our partner institutions, Luther College, a private liberal arts school in the Midwest, is doing a particularly good job of establishing the value of a college education by crafting its communications to emphasize post-graduate outcomes. Luther highlights, for example, a 99.4% employment rate for graduating classes, high average alumni salaries, and student success stories that resonate with prospective Luther undergraduates. Luther reports its applications rose 11% last year.
But, of course, the most important “dividend” for the efforts of enrollment managers is the matriculation of the students they have found and chosen. When I was an enrollment manager at a number of schools that were “top choice”—and sometimes expensive—for many students, I was disappointed when a student I had recruited and admitted chose to go elsewhere, particularly because of financial concerns.
Our Royall & Company Deposit IQ study validates my belief that this kind of attrition can be mitigated with data-driven strategies to communicate affordability, optimize financial aid, track deposit activity, and articulate long-term ROE. First-choice schools need not lose their first-choice students.