Posts tagged ‘Mark Kantrowitz’

February 22, 2013

Maximizing college revenue through financial aid allocation

by Grace

How are college financial aid decisions made?  Some insight can be gleaned from a paper presented at the 2007 Frontiers in Education (FIE) Conference – Deriving Financial Aid Optimization Models from Admissions Data.

… Financial aid is used to achieve a number of enrollment objectives, including diversifying the student population, attracting strong students, and maximizing tuition revenue. While financial aid generally positively affects applicant enrollment decisions, the effect on the probability of enrollment varies across applicants….

Schools obtain as much information as possible from each applicant as this helps them predict how a particular student will react to a given level of financial aid offered.  Schools gather data such as grades, test scores, financial resources, intended major, caliber of high school, extracurriculars, etc.

The expected tuition revenue from any given applicant who has been offered a particular amount of financial aid can be obtained by multiplying the probability of enrollment by the revenue obtained at that financial aid level. As the financial aid increases, the probability of enrollment increases but the tuition revenue decreases. So for each applicant there will be a financial aid offer that maximizes the expected revenue from that student. Our objective is to offer each student the amount of financial aid that maximizes tuition revenue, subject to capacity constraints. Developing such an optimization model requires first developing a predictive model that can determine for any given student the probability of enrollment for each level of financial aid offered.

The graph might look like this for a particular student, with a typically nonlinear relationship between probability of enrollment and financial aid.


Multiplying this curve by the linear relationship between percentage revenue and percentage financial aid generates the expected revenue at each level of financial aid.

For this particular applicant, the maximum expected revenue occurs when 50% financial aid is offered.


They’ve got your number, so to speak.

The goal is to get the most tuition revenue from the existing pool of applicants.  Here’s how Mark Kantrowitz described the sophisticated enrollment management techniques colleges use to attract desirable students and maximize revenue.

“A lot of it is done by computer programs to calculate how much aid they need to offer to each student so they can get the maximum number of desirable students without going over their financial aid budget,” says Mark Kantrowitz, the publisher of and

Many regional and religious colleges, he says, also try to “optimize their revenue” by offering partial scholarships to the students who can pay the rest of the tuition — even “B” students with an SAT verbal and math score of 1200 or less. Caution: You’ll have to maintain a grade-point average of about 2.7 to 3.0 to renew most scholarships after your first year.

April 4, 2012

Helpful FAFSA Q&A from Mark Kantrowitz

by Grace

Mark Kantrowitz answered FAFSA questions from readers of the NY Times The Choice blog.

To help readers of The Choice fill out the Free Application for Federal Student Aid, or Fafsa — the form that so many families will begin tackling this month to initiate the process of receiving financial aid from the federal and state governments — Mark Kantrowitz, a financial aid expert and founder of the Web sites and, is taking questions this week in our virtual Guidance Office. Mr. Kantrowitz is the author of “Secrets to Winning a Scholarship,” published last February.

I always learn something new from reading these types of articles.  Did you know that in completing the FAFSA, a parent’s two-year associate’s degree counts as having “completed” college?  However, this may be a trick question if a student is trying to qualify for some types of financial aid.  Here’s the explanation from Part 2.

Q.  I’m not sure how to answer the question on parent’s education level. I have an A.S. degree and took some classes at a four-year college but never got my baccalaureate degree. Have I “completed” college? – PSB

A.  The purpose of this question is to determine whether the student is the first in his/her family to attend college (i.e., the highest level completed by either parent is middle or high school). Some states and colleges provide special grants and scholarships to these “first-generation” college students. First-generation college students are at higher risk of dropping out.

Note that these questions should be answered based on the birth or adoptive parents, not step-parents, foster parents or legal guardians.

For the purpose of this question, receipt of an associate’s degree is normally considered to have completed “college or beyond.”

The question is badly worded because some programs for first-generation college students distinguish between “no college,” “some college, no degree,” receipt of an associate’s degree and receipt of a bachelor’s degree.

If you are unsure as to the proper answer, select the “Other/unknown” option.

Here are links to the complete series.

Part 1: Answers on the Fafsa, the Free Application for Federal Student Aid

Part 2: Answers on the Fafsa, the Free Application for Federal Student Aid

Part 3: Answers on the Fafsa, the Free Application for Federal Student Aid

Part 4: Answers on the Fafsa, the Free Application for Federal Student Aid

Part 5: Answers on the Fafsa, the Free Application for Federal Student Aid

Last of 6 Parts: Answers on the Fafsa, the Free Application for Federal Student Aid

October 13, 2011

Top ten college scholarship myths

by Grace

Top ten myths courtesy of Mark Kantrowitz

  1. Only straight- “A” students win scholarships
  2. Only minority students win scholarships
  3. My child will get a full-ride scholarship
  4. Only athletes win scholarships
  5. Only the poor win scholarships
  6. Scholarships are just for high-school seniors
  7. The cost of private high school is earned back in scholarships.
  8. $6.6-billion in scholarships went unclaimed last year
  9. Colleges will just reduce other aid if a student has a scholarship
  10. Applying for scholarships is more work than it’s worth

My two cents

Myth 6:  I have no idea how to go about finding college scholarships for younger students, including those that Kantrowitz says students can apply to “as early as kindergarten”.

Myth 9:  I question this one if the “other aid” is need-based.  Most schools do not permit a student to “stack” merit money on top of need-based money.  Instead, a scholarship would simply reduce some or all need-based aid.  Anyone in this situation should check with the specific college before assuming stacking is allowed.

July 16, 2011

Cutting Pell Grants and subsidized loans would lead to student riots?

by Grace

This weekend, July 16th and 17th, members of Congress and the President are likely to craft a debt reduction deal that could slash Pell grants.

July 25 is Save Pell Day.

Mark Kantrowitz predicts dire consequences, including colleges forced to close and students rioting:

The game of chicken being played out in Washington, DC, may have serious consequences for student financial aid as well as the rest of the economy….

Instead of defaulting on the debt, the White House would need to decide which among the other expenses must be cut….

In such an environment, spending on student financial aid would almost certainly be eliminated. Student financial aid is not one of the top spending priorities according to internal rankings by the Office of Management and Budget. It isn’t even in the top 10. Effectively this means that the Federal Pell Grant program and the federal education loan programs, which together represent more than $150 billion a year, would be suspended. This would force millions of students to drop out of college because they could not afford to pay for college without student aid. This, in turn, would force most colleges to lay off faculty and staff. Many colleges would have to close. The only alternative would involve doubling tuition rates, guaranteeing nationwide tuition riots.

During the ongoing debt negotiations, one side proposed eliminating the subsidized interest on federal student loans. Currently, the federal government pays the interest on subsidized Stafford loans during the in-school and grace periods. Both parties have already proposed eliminating the subsidized interest on loans to graduate and professional students. The new proposal would eliminate the subsidized interest for undergraduate students as well, saving the federal government an additional $4.3 billion a year.

According to Kantrowitz, eliminating the subsidized interest benefits would increase the amount of debt at graduation by about 8%.   That’s not good, especially for students graduating with poor prospects for well-paying jobs.

Cuts in federal financial aid spending will likely curtail the administration’s overriding objective of enrolling more students in college, which might not be a bad thing.  Fixing the problem of high school graduates unprepared for college-level work should take priority over the goal of higher education for everyone.

Previous post:  The end of subsidized Stafford loans?

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