Financial Aid Timelines Sway Student Enrollment

For most prospective college students, the amount of financial aid they receive is one of the most important—if not the most important—factor in choosing where to attend. According to a new survey from Ellucian, an educational technology company, 76 percent of students said their financial aid award helped them determine where they enrolled, and 44 percent said they’d switch their top choice institution if they received $5,000 more from another college.

But it’s not just a dollar amount that can affect enrollment decisions; it’s also the time it takes to receive an offer and how transparent that offer is about the full cost of a degree.

The report is based on a survey of 1,500 students, 58 percent of whom are working adult students and 42 percent of whom are traditional-age students. Twenty-two percent of respondents said they would choose a different institution if the paperwork processing at one took more than two weeks, 73 percent said they’d move on if it took over a month and 92 percent would look elsewhere if processing took eight weeks.

Kim Cook, president of the National College Attainment Network, said the findings illustrate the importance of demonstrating affordability, not only for colleges’ own enrollment efforts, but also for the broader mission of equitable college access.

“That demand for a two-week processing turnaround just shows how anxious students can be about their ability to afford [college],” she said. “Early messaging is essential in assuaging those concerns and boosting confidence.”

The finding is especially relevant after this year’s chaotic financial aid cycle, in which processing was delayed by weeks or months in some cases due to the disastrous rollout of the new Free Application for Federal Student Aid. That meant many students didn’t receive their aid offers until months after submitting the form; for anyone who submitted a form before May, processing likely took even longer than eight weeks at colleges that don’t use the FAFSA alternative, the College Scholarship Service Profile.

“It’s not that the stress of financial aid is anything new,” Ellucian CEO Laura Ipsen told Inside Higher Ed. “It’s just that the continued complexity, the amount of time it takes to get clarity, is even more difficult for students.”

The report also emphasized the extent to which prospective college students rely on adequate aid to make higher education feasible. More than half of respondents said they often had to choose between paying tuition and fees and affording basic needs like food and clothing.

Cook said those are the students for whom seamless, timely and clear financial aid offers and communications are most important.

“For many of the underprivileged students we serve, it’s not that financial aid offers influence where they go, but if they go at all,” she said.

A Sales Pitch in a Storm

The report also showed that students care about a college financial aid office’s accessibility and support infrastructure when parsing their financial aid offers. Forty-four percent of respondents said they would hang up after 15 minutes on hold on a college’s help line, and 83 percent said they valued having 24-7 access to support. This year, colleges and state aid agencies were swamped with calls from concerned families and counselors dealing with the new FAFSA.

“It’s not just ‘Am I going to get the financial aid I need?’” Ipsen said. “The report showed that students are also basing their decisions on ‘What’s my digital experience with this institution?’”

Ellucian, not coincidentally, is in the business of enhancing students’ “digital experience.” The educational technology company owns Banner, one of the most popular financial aid software products in the U.S., along with a large portfolio of educational technology products for financial aid officers and enrollment managers. The new report advertises several of those products as solutions to financial aid–related enrollment struggles, including an AI-powered 24-7 financial aid adviser and a personalized net price calculator.

Cook said that because of Ellucian’s obvious business stake, the report’s findings, while interesting, should be taken with a grain of salt.

“They’re clearly selling things with this report,” she said. “I don’t want to stump for this company.”

Ipsen believes that in the wake of the FAFSA fiasco, the demand for technological solutions to financial aid frustrations is higher than ever among families as well as institutional leaders. Ellucian, she said, is only trying to help provide solutions for pressing problems.

“Creating these tools that take the burden off of these manual processes and delays and that can be more predictive and more communicative 24-7 to students, that’s important,” she said. “Now with AI, we have a virtual adviser that will ramp up these capabilities even faster for institutions.”

Cook agreed that extended processing delays this year have alerted more colleges to the importance of demonstrating their own affordability quickly and clearly. But she said the best way to do that is by staffing up critically overburdened financial aid offices hurt by workforce shortages across higher ed—a problem only exacerbated by this year’s FAFSA challenges.

“I understand why we’re looking for ways to leverage technology to solve these problems,” Cook said. “But the ideal scenario is that people are providing this support.”