Here are some trends in higher education worth noting: tuition prices are rising, applicant pools are skyrocketing, acceptance rates at top schools are dwindling, and for “lower-tier schools”, enrollment numbers are decreasing. These trends reflect an increasing competitiveness in the marketplace, and other than the top 30-40 of them, colleges and universities nationwide are trying to increase their yield and applicant pool simultaneously.
So how do they do this?
For the past half-century or so, ‘merit-aid’ has been the primary strategy, or at least the one that’s garnered the most attention. Colleges will offer “merit scholarships” and “grants” to acceptees in the hopes they’ll choose their school over others. This has shown to be an effective strategy to keep schools afloat financially, and especially so lately, now that tuition prices are at peak highs. But because ‘merit-aid’ is essentially a sales pitch, the term ‘merit’ is misleading – calling it a ‘discount’ would be more accurate. Sure, merit has something to do with it, given that by and large high-performing students are receiving these discounts in the first place. But why then are ‘B’ students also being offered ‘merit-aid’ at the same schools?
The answer to this is a bit complex, so before I give it, I’ll speak to how competitive – and how granular – marketing strategies have become since ‘the Internet’. Admissions Offices have a whole new branch now called “Enrollment Management”, where consultants and data analysts are hired to craft customized, attractive and targeted acceptance letters to each acceptee. Algorithms and marketing strategy, along with money of course, are poured into the wording of the letter, to the timing of its delivery, and even into the precise amount of ‘merit-aid’ to offer, down the dollar. Giving the scholarship a name seems to also help close the deal (thinking on it now, if I was offered the ‘Orson B Hatherford Scholarship for the Academically Gifted’, written out in Roman numerals and classical font, I would be swayed).
In effect, these scholarships most often target high-scoring students, because an incoming class with top SAT scores and GPAs leads to higher rankings. Giving good deals lures high value clients away from competitors. But because the cost of faculty and administrator salaries is so high for any given school, not to mention the upkeep of amenities and facilities, colleges can’t give merit-aid to everyone. Tuition is higher education’s main source of revenue, after all. And in effect, a ‘B’ student at an otherwise ‘A’ school might be offered a 25% discount, because they’re more likely to accept than many ‘A’ students who, even with a 50% discount, have offers from elsewhere.
What plays out, in effect, is a balancing act of offering just the right amount to any given student. Price tags are determined by the algorithms of “Enrollment Management”, and the billion-dollar consulting industry behind it. They crunch numbers based on previous test scores sold by the College Board, personal website browsing history and activity (down to how long you spend on each page on their website), and other data. The result is a heavily orchestrated advertising campaign, catering to behavioral probability. Unfortunately, this balancing act tends to favor the wealthy over the less wealthy, but I’ll save the effort to unpack that for another time.
It’s tempting to get cynical here, and assume that contemporary admissions is about numbers only – a crapshoot. But in my opinion, such a reaction would be knee-jerk, albeit with a shade of truth. Merit-aid is actually partly responsible for why admissions essays – the most non-quantifiable aspect of the college application – are increasingly important these days. Admissions officers are still passionate about finding real humans behind the dehumanizing sea of numbers, and creating well-rounded student bodies, similar to what we all experienced in college. In my next blog post, I’ll explain how the college essay fits into this story.
To read more on what Merit-Aid means for parents and students, and how to use this information to one’s advantage (no matter what your academic or financial situation is), wait for my next blog post, Merit-Aid Part 2.
Henrik Herb - Education Consultant 