What do we know about the impact of the design, operations, and marketing of financial aid programs on college enrollment?

It has been well-established that the price of college and the availability of financial aid influences students' college-going decisions, especially with lower-income and minority youth. The amount of financial aid is a huge factor. But what role, if any, is played by the way financial aid programs are designed, run, and marketed to students?

Several research studies have demonstrated that middle and high school students and their parents frequently overestimate the price of college while underestimating the availability of financial aid. To counteract these misperceptions, policy makers, advocates, and researchers have recommended creating marketing campaigns to publicize the affordability of college and redesigning financial aid programs to make the actual price of college more easily understood.

In part, these recommendations are based on knowledge gleaned from commercial marketing research. Complex and difficult-to-understand products and services are less likely to be understood by consumers and more importantly, less likely to be successful in the marketplace. In the case of financial aid, the students most in need may not use it because the types of aid and the processes for securing it are hard for them to grasp.

To better understand the possible role of marketing and simplification efforts in increasing the effectiveness of student aid programs, TERI, with support from Lumina Foundation for Education, recently commissioned research reviews to identify what is known about the impact of financial aid program design, operations, and marketing on the perceptions of lower-income and minority youth and their parents. The reviews concluded that little, if any, research exists on these important issues.

It is clear that more research is needed to understand how students and families perceive financial aid, and how changes in financial aid program design, operations, or marketing can influence critical college-going decisions.

For accompanying literature, click on the hyper-linked report below. Clicking on any of these links will open up a PDF document.

• SUMMARY PROJECT REPORT: An exploration of what we know about the formation and impact of perceptions of college prices, student aid, and the affordability of college-going and a prospectus for future research, David S. Mundel and Ann S. Coles, The Education Resources Institute;
• Impact of Student Aid Program Design, Operations, and Marketing on the Formation of Family College-going Plans and Resulting College-going Behaviors of Potential Students, Dr. Laura W. Perna, Graduate School of Education, University of Maryland;
• The Impact Advice on Price: Evidence from Research, Dr. Patricia M. McDonough, Graduate School of Education and Information Studies, University of California Los Angeles;
• Addressing Financial Aid in College Preparation Programs, Dr. William G. Tierney and Kristan Venegas, Center for Higher Education Policy Analysis, University of Southern California;
• The Impact of Information and Student Aid on Persistence: A Review of Research and Discussion of Experiments, Dr. Edward St. John, Indiana Education Policy Center, Indiana University;
• Financial Aid and Postsecondary Opportunity for Nontraditional Age, Pre-College Students: the Roles of Information and the Education Delivery System, Dr. Edward St. John, Indiana Education Policy Center, Indiana University, and Tina Tuttle;
• The Impact of Federal Financial Aid Policies on the Funding, Design, Operation, and Marketing of State and Institutional; Financial Aid Policies and practices: A Review of the Literature, Dr. David Longanecker and Dr. Cheryl Blanco, Western Interstate Commission for Higher Education;
• An Exploratory Review of the Literature and Possible Data Sources, Dr. Bridget Terry Long, Harvard Graduate School of Education.