It is no secret that financial aid is foundational to the relationship between an institution and students. Financial aid packages are one of the core factors that students and families use when deciding where to enroll. In today’s increasingly competitive enrollment environment, institutions face even more pressure to elevate the student financial aid experience and maximize aid reach.
Even before the COVID-19 pandemic, the average institutional financial aid package was increasing. During the 2019–2020 academic year, need-based institutional aid increased approximately 4.5 percent. A $400 increase to Federal Pell Grants is currently under consideration. Some high schools are considering making completion of the Free Application for Federal Student Aid (FAFSA) a graduation requirement.
Together, these increases in funding and activity add strain to financial aid offices and professionals across the US. Many institutions contend with these increases while also seeking replacements for veteran staff members due to retirements and other career changes.
This perfect storm has also laid bare unintuitive processes and the rough edges of the student financial aid experience. Many institutions are looking to technology to help address process gaps and smooth out the user experience.
Higher education financial aid technology solutions come in two primary flavors—standalone applications and solutions embedded into the institutional student system. Tambellini’s research suggests that institutions often select standalone solutions to address critical needs, such as management of institutional methodology or support for flexible academic structures and aid distribution. In some cases, the maturity of the financial aid module is driving student system selection as institutions seek to modernize.
While unique requirements are certainly a factor for selecting a financial aid solution, accuracy is the foundation of the decision-making process. Financial aid miscalculations and distribution errors have long-term ill effects for both institutions and students. Aside from the potential for incredible financial effects, these kinds of mistakes are detrimental to institutional reputations. A single calculation or distribution error can erode years of trust.
Financial counselors, managers, and leadership must have high confidence in the technology tools they rely on. This includes trusting that compliance regulations are supported and that processing is accurate.
The financial aid experience can influence all parts of the student lifecycle. Institutions are aware of how critical aid is during recruitment and enrollment. Ongoing access to assistance is also vital to retention and persistence for current students. The financial aid and institutional support experience can also heavily influence alumni involvement.
Although meticulous processes and accurate outcomes are essential, the system must not be a hurdle to end-users. With the right balance, financial aid professionals spend less time processing and answering questions, while students can easily access applications, submit documents, and check statuses.
There are several key takeaways from the current financial aid landscape for CIOs and other Information Technology higher education professionals.
For many institutions, financial aid and information technology have remained siloed. Some institutions have established partnerships between enterprise applications and financial aid, but the relationship between IT and financial aid must be bigger moving forward.
In addition to relationships between functional teams, financial aid leadership should be considered for inclusion on technology committees and governance structures. Financial aid leadership and professionals should also play a role in student system evaluation and other core technology projects, such as the section of a CRM. Much like IT, financial aid needs are constantly evolving. Building bigger relationships between IT and financial aid will allow institutions to address those needs more quickly and efficiently.
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