The higher education market is highly competitive. Students who drop out in order to attend a different institution, or who drop out entirely, will negatively impact graduation rates and generate lost tuition revenue. Not to mention, negatively impact their futures. All of these outcomes are important for the reputation and survival of colleges and universities, and feeds into the growing problem of debt without a degree. It behooves schools to focus on ways to retain their students, especially now, when COVID is having a dramatic effect on retention.
There are multiple factors that lead to student attrition. Many believe that academic under-preparedness, poor program fit with goals or expectations, and a difficult transition to college are the leading indicators of students abandoning their college journeys. However, the number one reason students drop out of college is financial.
Colleges have created countless programs to help students stay on track academically and ease the transition from high school to college, or community college to a 4-year university. All the while the cost of education has continued to rise and financial support for education has not kept pace.
Students struggling financially will have a difficult time in school regardless of the academic and social support they receive, because financial stability is the foundation. Research shows that it’s often living costs and surprise expenses, not just tuition, that are the problem. Struggling to pay rent or buy food forces students to focus on surviving over academic success. Per a Trellis survey of 38,000 students from 78 colleges across 20 states, at least a quarter reported running out of money five or more times over the last year.
COVID’s Impact on Retention
COIVD’s full impact on retention is still an unknown, but one thing is clear. A poll conducted by Third Way and New America found: “one in three college students believes that they ‘definitely or probably' needed more time to complete college due to the pandemic, and that either meant an additional semester (37% chose this option) or an entire year (48% stated this option). The longer it takes to complete a degree, the more costs are incurred and chances of not finishing will increase.
Schools were already competing heavily pre-COVID to enroll new students and achieve high retention rates. When schools don’t have their campus culture, experiences, and traditions to help justify ROI and keep retention up, they will have to find new ways to differentiate themselves.
The Importance of Emergency Funding
Most students would like to return to normal life and go back to campus. However, once they do, they will still face the financial challenges that existed pre-COIVD. Emergency funding programs and food pantries have been on the rise over the years to help retain students who are food insecure or in a short-term emergency. Per the same Trellis survey noted above, 57% of students at 4-year schools and 61% at 2-year institutions reported that they would not be able to come up with $500 in cash or credit for an emergency.
Students leaving school because of a short-term financial emergency is a tragedy for both the students and their institutions because it is largely, avoidable.
What can be done to keep up retention during uncertain times? Since financial barriers are the biggest blockade to keeping students enrolled in higher education, then providing students with resources to obtain emergency financial support is a great place to start.
The Boston Consulting Group has recently shown that, over a three-semester period, students who received need-based emergency aid stayed in school at a 51% higher rate than those who did not. However, there are real challenges institutions face with emergency funding programs. They vary from acquiring and earmarking funds, to establishing policy and procedures for the programs. But according to a study conducted by NASPA, in partnership with the Bill and Melinda Gates Foundation, one of the biggest and most common challenges was with the lack of effective technology.
Of the 500 institutions surveyed that provided emergency aid, most did so on individual spreadsheets across multiple departments. This lack of automation was one of the biggest challenges that impacted the effectiveness of these programs.
Emergency funding needs are only going to increase. According to NASFAA, current estimates suggest that students and institutions will need at least $120.4 billion for covering emergency financial aid, lost revenue and costs associated to safely reopen. This estimate is after the $14.1 billion institutions already received from the Higher Education Emergency Relief Fund known as the CARES Act. And it exceeds proposed bills for an additional $29 billion from the HEALS Act and $37 billion from the HEROES Act to help Higher Ed. Students and schools are going to need help closing the gap.
Here are three technology vehicles that help close emergency funding gaps:
“This has been an invaluable tool in awarding Federal CARES Act Student Emergency Funds to Mizzou students. The ease of combining the application data with our SIS data was extremely easy, and it made awarding the funds smooth and efficient for our staff!" –Emily Haynam, Executive Director of Student Financial Aid, University of Missouri
“Students have told me personally that they would have dropped out without the help of .” – Eileen Tucker, Director of Financial Assistance, Neumann University
“ has enabled our students to seamlessly complete the verification process through this pandemic, and allowed the FA team to insure timely award process completion and SAP, MTF, UEH, and EFC PJ requests reviews without skipping a beat.” -- Ray Ceo, Director of Financial Aid, Yavapai College
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