Imagining a Financial Aid Portal

Inside Higher Ed recently reported on a survey conducted by the educational technology company Ellucian on how college choice is impacted by a student’s financial aid experience. Ellucian surveyed 1,500 students, 58 percent of them working adult students and the remaining 42 percent traditional-aged students. EDITOR'S NOTE: THIS PARARAPH HAS BEEN CORRECTED TO REFLECT THAT ELLUCIAN IS AN EDUCATIONAL TECHNOLOGY COMPANY, NOT AN ENROLLMENT MANAGEMENT CONSULTING FIRM.

According to the survey, 76 percent of those responding indicated that where they enrolled was impacted by their financial aid award. But the size of the award was only part of their decision-making process. They were also focused on the quality of their interactions with institutions.

Twenty-two percent indicated that they would be inclined to change their college choice if it took longer than two weeks to process the financial aid paperwork. That increases to 73 percent after more than four weeks and 92 percent after more than eight weeks. Forty-four percent of the respondents also indicated that they would most likely hang up after being on hold with a financial aid office for fifteen minutes.

Laura Ipsen, Ellucian’s CEO, told Inside Higher Ed that “‘It’s not just ‘Am I going to get the financial aid I need?’” She also pointed out, “The report showed that students are also basing their decisions on ‘What’s my digital experience with this institution?’”

She may very well be right, but that conclusion should be taken with a grain of salt. It’s self-serving, because Ellucian happens to be in the digital experience business (it owns Banner).

Still, as someone focused on the intersection between ethics and college admission, there was one statistic in the Ellucian survey that got my attention. Forty-four percent of respondents indicated that they would switch their top college choice if offered an additional $5,000 in aid from another college.

Whether and to what degree net price should be a factor in college choice is not a new issue. Back in the early 1990s, a group of elite colleges known as the Overlap Group compared and adjusted financial aid packages for individual applicants applying to multiple institutions within the group. Their argument was that students should decide between institutions without being influenced by differing financial aid packages. That view was not shared by the antitrust division of the U.S. Department of Justice, which saw the Overlap Group as engaging in price-fixing and restricting competition.

More recently, the Justice Department sued (and settled with) the National Association for College Admission Counseling (NACAC), which agreed in 2019 to alter its Code of Ethics and Professional Practices (CEPP) to delete a section prohibiting poaching, or attempting to recruit students committed to another college, after the May 1 “National College Decision Day.” Sweetening an existing financial aid offer or offering a new scholarship is the most common practice used to initiate poaching.

I was a member of the task force that developed the CEPP, and the rationale for the prohibition was protecting students from predatory practices by colleges. The Justice Department saw things differently, interpreting NACAC as interfering with institutions’ ability to compete, and by extension preventing families from paying less for higher education.

I have spent most of my professional life believing that, in a perfect world, choosing a college shouldn’t be first and foremost an economic decision. But we don’t live in a perfect world, and my view on that issue may be softening.

In ethics, there is an inherent tension between what is ideal and what is practical. Ethics is normative, about how we should act, but any ethical principle that isn’t pragmatic is worthless.

Back in the 1990s, the NACAC Statement of Principles of Good Practice (the SPGP, a precursor to the CEPP) required members to practice need-blind admission. That encompassed two different pieces. One was making admission decisions without consideration of financial need, and the other was meeting the full need of admitted applicants. There came a point where a number of member institutions argued that they could no longer do both of those, and the SPGP was amended after a contentious debate.

Are we at a similar inflection point when it comes to offering additional scholarships and financial aid to entice students to switch enrollment? That practice doesn’t pass the smell test, but we are entering a new paradigm for both applicants and colleges. We know that the cost of higher education is a huge issue for families, especially those for whom the biggest impediment to going to college is financial, and if the Ellucian survey is even close to accurate, nearly 50 percent of students are open to changing their first-choice college for as little as $5,000 in additional aid. At the same time, this year’s FAFSA (Free Application for Federal Student Aid) fiasco has placed many tuition-driven colleges in existential jeopardy.

I’m not arguing that this is a good idea, but I am wondering if there is a way to match students needing (or at least wanting) additional financial aid with colleges willing to provide it without college admission deteriorating (further) into the Wild West.

From an ethical standpoint, it makes a difference who initiates a scholarship offer or request. It is kosher for the family of a prospective student to inquire about additional aid, especially if the student is already an applicant. For a college to make an unsolicited scholarship offer is more questionable.

If there is a growing population of students willing to change their first-choice college for an additional $5,000 and a growing cohort of colleges needing and willing to accommodate them, perhaps we need a mechanism to bring them together. And, as it turns out, there is a model in place, albeit an imperfect one.

Perhaps we need to establish a financial aid portal along the lines of the athletic transfer portal currently in use to match athletes looking to transfer with college coaches looking for an infusion of new talent. Families desiring to signify their willingness to switch college allegiances in exchange for additional aid could register with the portal, giving colleges a chance to reach out to students who have initiated the process.

There are obviously some details to be worked out, and I’m happy to leave those to others. How might we prevent this from deteriorating into an arms race of desperation? Would $5,000 be the threshold or could families register for higher amounts? Should the original college choice have the ability to match any offers?

The biggest issue, of course, is the irony of adopting the athletic transfer portal as a model. It may not compare with rain on your wedding day or a free ride when you’ve already paid, and it falls short of Steve Buscemi’s definition of irony in the movie Con Air, “a bunch of idiots dancing on a plane to a song made famous by a band that died in a plane crash.” But establishing a financial aid portal to prevent college admission from turning into the Wild West modeled after a process that has turned intercollegiate athletics into its own Wild West would be the ultimate example of “Define Irony.”