How to Build the Financial Aid Office of the Future

July 22, 2020 | 4 minute read
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By Nicole Engelbert, VP, Higher Education Development, Oracle

Higher education institutions are in crisis mode because their current and prospective students are in even crisis: College is increasingly unaffordable for many students. A report by the National Center for Education Statistics found that three-quarters of Americans surveyed felt that college was not affordable for all people.

The financial aid process is confusing and frustrating, due to a patchwork of funding solutions and paperwork requirements. In most areas of students’ lives, technology empowers, rather than obstructs. The college admissions and financial aid process, however, can feel like a bureaucratic morass. They must decipher the FAFSA form, apply it to their family’s unique circumstances, and determine if their “expected family contribution” (EFC) will stop them from attending the institution of their choice—or attain a higher education at all. 

For financial aid staff, manual processes, regulatory demands, and siloed systems make a tough job even more challenging. They spend far more time on paperwork than advising students — many of whom have complex financial situations — navigate their financial aid needs.

This all leads to one big question: What can financial aid officers do differently to make the financial aid process more effective for students of all backgrounds, to help them achieve their academic, professional, and personal goals? With the right tools, it turns out they can do a lot.

How technology forms the foundation of the financial aid office of the future

At Oracle, we focus on empowering higher education institutions to apply innovative solutions to difficult problems. A student’s financial circumstances should not be the primary determinant of whether they are able to attain a postsecondary degree and reach their professional dreams. 

As part of this goal, we teamed up with Huron Consulting to research how higher education institutions can transform their financial aid functions to make this vision a reality. The report, Leveling the Playing Field: A Student-Centric Approach to Higher Education’s Affordability Crisis, leverages publicly available data with the expertise of leading financial aid professionals. The end result is a guidebook that provides solid steps to improving the two halves of the affordability crisis: the financial aid process and the cost of college attendance.

Fixing the higher education financial aid process

Financial aid staff are faced with a tough job. Regulatory requirements add complexity to the already-fraught process of applying to college. Processes, deadlines, and award amounts differ wildly among colleges, grant programs, and scholarship organizations. These demands aren’t just frustrating for students; they often require staff to spend more time on paperwork than advising students.

It’s crucial for processes to become more streamlined, transparent, and personalized. At the same time, financial aid staff needs to be able to work closely with admissions as students see the two functions as a holistic experience. Silos also need to be dropped between financial aid and advancement offices as institutions rely more heavily on fundraising efforts. Treating financial aid as a back-office function that can rely on legacy processes and systems is no longer feasible. 

Financial aid staff must be trained and comfortable with moving to more forward-facing roles, such as working directly with students and discussing the importance of fundraising for the affordability of their institution. At the same time, financial aid professionals must be savvy with new technologies that streamline and automate manual processes and drive data-based decisions. This will free up time for them to focus more on students’ individual needs.

Cutting the cost of postsecondary education

The second half of this equation is cutting the ever-increasing costs of obtaining a college degree. Between 2008 and 2018, tuition costs at public institutions rose as much as 37 percent, while per-student state funding at two- and four-year institutions dropped by an average of 13 percent. In 2017, the total cost of attending a public four-year institutions took up nearly a quarter of the average family’s household income. For households of color, it was as much as 40 percent.

These untenable figures contribute to the affordability crisis. And while on the surface it may seem like a problem that is above the financial aid office’s pay grade, there are steps that can be taken that can help. These include:

  • Reducing overhead by leveraging technology that automates and streamlines manual processes
  • Hiring professionals who are comfortable with new technologies, as well as face-to-face financial aid advisement with students
  • Aligning closely with admissions to improve outreach and communication, providing a continuous experience as applicants become students
  • Leveraging data insights to support innovative funding initiatives and advancement/fundraising teams.

One such example of how multiple campus offices and technology can come together to bring change is University of Wisconsin-Madison’s Bucky’s Tuition Promise, the university’s scholarship for low- and middle-class students. At the UW-Madison’s Success Through Applied Research (SSTAR) Lab, researchers looked at the relationship between prospective students’ adjusted gross income (AGI) and EFC via the FAFSA. Having data to show that the AGI was a more relatable figure for students and families helped leaders create an alternative source of aid for those who needed it but didn’t necessarily qualify for other packages like the Pell Grant.

A vision for the financial aid office of the future

While no single solution is possible for such a complex problem — the variables between institutions and individual students are enormous — it is apparent that now is the time to innovate to address the disparity in higher education affordability. Financial aid offices can help lead this innovation by driving technology innovation and rethinking their roles. 

“The turning point will be what institutions do now and how they approach financial aid today,” said Derek Kindle, vice provost for enrollment management, University of Wisconsin-Madison. “Those who are entrenched in traditional financial aid will find it hard to make the shift as other institutions advance past them.”

At Oracle, we are dedicated to helping institutions like yours make this transformation. 

Download our report, Leveling the Playing Field, for a deeper dive into this issue and potential solutions. And learn more about Oracle’s solutions for higher education.

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