The higher education business faces three issues: increased student debts, reduced completion rates, and raised costs. Many students apply and receive financial aid. However, the majority of them have unmet financial requirements and may seek loans or stop schooling altogether. Innovations in financial services can help them advance their studies and pay for their tuition and other school needs.
The Problems of Higher Education
According to U.S. News, the average cost of tuition and fees for an in-state public college student for the school year 2021-2022 is $10,388. However, for out-of-state students in public colleges, the costs can rise to $22,698. These amounts are much lesser than the $38,185 each student may spend in a private college.
The Higher Education Act of 1965 provided financial aid to all students. This law increased access to a college education. However, in the December 2020 Completing College: National and State Reports of the National Student Clearinghouse Research Center (NSCRC), the completion rate for students entering college experienced a marginal increase of 0.3% (60.1%) for the national six-year completion rate. On the other hand, the national eight-year completion rate decreased by 0.5% (61.3%).
Many students work while studying, aside from attending to other obligations. Financial aid programs can improve the rate of college completion and address these challenges. However, any financial help doesn’t cover all expenses. Therefore, it is not surprising to discover that low-income students struggle to afford food, rent, and transportation. They rely on loans to finish college and leave them debt-ridden after graduation.
How Students Advance Their Studies
Providing year-round financial aid can increase credit accumulation and enrollment during the summer to help learners finish college early. The reinstatement of Pell Grants year-round offers additional financial help to students enrolled in the summer.
Undergraduates studying during the summer break have increased retention rates and are more likely to finish their degrees. Zoomifier suggests that encouraging learners to enroll during the summer and winter breaks and offering them financial support result in better credit accumulation and increased intersession enrollment.
Performance-based scholarships promote academic progress. Students who meet specific academic benchmarks can apply. Expending financial aid refunds in small increments can support low-income students instead of the usual aid refund delivery.
The Next Step Towards Innovation in Student Financial Services
Educational institutions make enormous and new investments to ensure student success. However, the success toolbox is awash with means that they are not using. For instance, they spend massive amounts of money and time quantifying aid in the recruitment process but do not use it for retention.
Increasing financial aid budgets can help students continue schooling. However, it is more challenging to secure the expansion in unfunded aid budgets.
Here are three ways to innovate aid program design:
- Financial aid can encourage success-related behavior.
Generally, institutional aid is a tool to help learners finish college and limit the need to apply for loans or work. However, it can also boost excellent academic behavior and promote better institutional engagement. Sadly, merit aid usually goes to high-performers who need it the least.
Additionally, merit aid has GPA requirements. On the other hand, some students may not realize the correlation of academic behaviors with success. They require definitive guidance about specific actions that can help them succeed. At-risk learners who want scholarship money must achieve certain behaviors to be academically successful.
- Coherent communication and monetary aid opportunities are essential to enrollment.
Students find the process of applying for financial aid confusing. Educational aid literacy is not up to par despite the numerous political initiatives to reform it. Several junior school learners do not even know what FAFSA is. The lack of aid literacy is the number one reason at-risk, first-generation, and low-income populations fail to further their studies.
Failure to understand or cynicism in applying for the financial aid package makes students from these groups fail to continue college even though they hurdle the admissions process. Institutional initiatives must clarify the entire aid system to boost retention, increase yield, and reduce cumulative debt.
- Enforcing payment of unpaid balances is a loss for students and institutions.
Issues about unpaid balances are unavoidable. Some educational institutions purge undergraduates from their roll because of unpaid bills yearly. Generally, the policy is to remove nonpaying students immediately after the payment deadline. Colleges and universities hope that these learners can find ways to pay off the debt and go back to school. These educational institutions pressure these students to pay their past-due accounts. However, this strategy is only effective if a learner has the money to pay.
Students who stop schooling because of unpaid balances have fewer chances of completing a college education. Purging these learners from the roll also means that educational institutions lose any loans, tuition, or grants from these students for the current and future semesters. Forgiving small debts can keep them on track while keeping millions from tuition fees that these colleges and universities would have lost otherwise.
Forgiving or waiving partial balances can maintain tuition revenue and keep students enrolled. Some institutions may disagree about condoning unpaid debts because this act can create a contradictory incentive. A student may intentionally not pay their bills because they can get a hand-out. However, disciplined data collection and targeting by the higher education institution can ensure that they know learners in need. They will limit the change of students gaming the system.
Final Thoughts
The higher education industry has experienced a lot of stress lately. It will remain in this situation until they can find new and innovative ways to offer a quality yet affordable education. Although these educational institutions rarely shut down because of tradition and faithful donors, they must serve the students and country by providing better financial services.
Educational institutions can consider the following ideas in their financial aid program:
- Financial aid can encourage success-related behavior.
- Coherent communication and monetary aid opportunities are essential to enrollment.
- Enforcing payment of unpaid balances is a loss for students and institutions.
About the Author
Emily Harrinson is a prolific editor of a London-based company and is one of the best assignment writers uk. She is influential in the editing industry because of her oozing positivity. Her hobby includes reading books, listening to music, and engaging in sports. If you wish to pay someone to do an assignment, do not hesitate to connect with her.
