The Department of Education’s new prior-prior year (PPY) rule for the FAFSA will enable students to file several months earlier than previously. While there’s no corresponding mandate for schools to expedite their aid packaging, many are scrambling to do just that. But should you? The considerations outlined below should help you decide.
Students you’re recruiting for your 2017 entering class will be the first to file FAFSA under PPY. The big implication for you as an enrollment leader is that you’ll be able to offer students complete aid packages—and complete transparency on price—far earlier in the admission process.
Our expectation is that many schools will in fact accelerate their aid packaging calendars, under the reasonable assumption that this will give them a competitive edge. However, those that do will need to consider implementing a number of important operations and strategic considerations. Here are a few you'll want to focus on if you're going that route.
1. A new basis for competitive advantage
Testing by Royall’s marketing analysts has shown time and time again that earlier engagement of students (in search and application marketing efforts, for example) boosts likelihood to enroll. There’s no reason to think that earlier aid packaging will be any different. If anything, we expect it to have outsized impact on student decision making—impact that will translate directly into competitive advantages for schools managing to package aid earlier.
2. Rethinking value conversations
Under the old FAFSA calendar, admission offers were typically made months before aid packages were presented—time during which schools could build affinity with accepted students and mitigate any potential price shocks to come. With admission and aid offers coming more or less simultaneously under PPY, schools will need to move value conversations forward in time. They'll also need to figure out ways to capture student mindshare prior to an offer being on the table.
3. A new audience for FAFSA communications
We’ve always recommended that schools proactively reach out to students with FAFSA-specific communications, which increase the percentage of students filing and boost yield. Whereas campaigns of this sort previously would have focused on admitted students, under PPY they’ll additionally need to engage your inquiry pool, and they'll need to do so well in advance of the release of the FAFSA in October.
4. FAFSA info as an admission parameter
Under PPY, students are likely to be filing the FAFSA around the same time that they’re submitting applications. This will greatly increase schools’ ability to factor financial need into admission decisions. Not all schools will embrace need-aware admission practices, but those that do will face challenging decisions releated to how to allocate limited aid resources across their prospect pool.
1. A new multitasking imperative
Under PPY, admission processes that previously unfolded sequentially will overlap in time. Aid packaging, for example, may begin as early as November, which means that your staff will have to engage that task even as they’re soliciting and evaluating applications. Yield management efforts will similarly be pulled forward in the calendar, creating further overlap.
2. New coordination challenges across university departments
If you’re going to move your aid packaging forward in time, you’ll also need to ensure that all the other individuals and departments on whose cooperation that depends are on the same page as you timing-wise. One important and obvious example is that of setting tuition price—something your board, president and others will need to start thinking about earlier in the year.
3. Greatly extended yield-management time frames
With aid packaging happening as early as November under PPY, you’ll need to be managing yield across time frames as long as six months. Keeping admitted students engaged across this span of time will require an entirely different sort of yield-phase communications strategy than you’re probably used to.
4. Increased family appeals likely
PPY means that students will be able to file a FAFSA based on income information from the year before last. This also means a longer time frame across which their families’ financial circumstances might change—17 months, versus 4 months under the old calendar. It’s reasonable to expect that this increased window of time will boost the number of appeals you’re getting.
Understanding the challenges and opportunities emerging from PPY FAFSA is going to be critical for you, moving forward, but that’s only half of the picture. The other half is figuring out how you'll address those challenges and opportunities. In our view, much of the correct response—from a strategic standpoint especially—boils down to earlier and more effective engagement of students.
Because the new financial aid calendar will give students full transparency about price earlier on, you can be sure that value will weigh more heavily in their decision making. You’ll want to do whatever you can to set the terms on which that discussion happens, and in a way that is genuinely helpful to students.
Initiating outreach to students earlier, with information that acknowledges their concerns and increases their ability to make good decisions, will not only help them better understand the value of attending your institution. It will also help you build the sort of affinity with them that can come only from sustained engagement over time.