Prior-Prior Year: How well are you addressing students’ concerns about affordability in the new environment?

Wes ButterfieldSenior Vice PresidentJanuary 11, 2017

This post is the first part of a two-post series on opportunities associated with the new Prior-Prior Year regulations which went into effect in fall 2016.

Prior-Prior Year is now in its fourth month. How well prepared is your campus for the new realities of today’s marketplace? And how are you making a stronger case for your affordability using P-P-Y for today’s cost-conscious families? Consider:

  • 2 million students will graduate from U.S high schools every year for at least the next 10 years (Western Interstate Commission for Higher Education, 2016).
  • Approximately 62 percent of American students annually will consider postsecondary education (National Center for Higher Education Management Systems, 2016).
  • The price tag of higher education has nearly doubled in the last 20 years (Perry, 2016). There are no consumer goods or services that have increased more than the annual cost of college education since 1996. If we compare the overall consumer prices of all goods and services during this same period, the cost of higher education has increased in real dollars by more than 94 percent.

Need evidence that cost is a growing concern? The Cooperative Institutional Research Program (CIRP) Freshman Survey is part of the Higher Education Research Institute, which is part of UCLA. The survey, which has a fifty-year history, is administered to incoming first-year students before they start classes, allowing campuses to understand student perceptions about college prior to time on campus and in classrooms. The 2015 CIRP Freshman Survey indicated that the top reason students chose the institution they attended was academic reputation—not surprisingly, this has remained the number one reason for several years. The third and fourth reasons focused on financial aid and cost. The overall amount of financial aid offered was the third reason, and the overall cost of attending the college was the fourth (Cooperative Institutional Research Program, 2016).

In addition, a study by Ruffalo Noel Levitz found that Caucasian and African American students are more likely to have discussions regarding college financing versus parents of Hispanic and Asian American students. Of the parents who are “very involved” in the college selection process, as many as 72 percent have had conversations with their students about college financing (Ruffalo Noel Levitz, 2016).

Address the cost conversation earlier—Prior-Prior Year brings new opportunities

There is no doubt that institutional awards and state financial assistance affect students’ choices of postsecondary institutions; unfortunately, students and families often are not informed of their financial aid package or other sources of financial assistance until after students are admitted (Renn & Reason, 2013). This is changing, however. Fall 2016 was the first fall in which campuses were able to begin awarding financial aid to admitted students as early as October 1—which many campuses are referring to as Prior-Prior Year awarding. Because many students and families have an unrealistic understanding of how they will pay for college, the additional time in the process to assess financial aid and determine how much a family can contribute to total cost of attendance is beneficial.

Now more than ever, price and financial aid are primary factors in determining college choice for students, and we must encourage families to continue discussing cost in their households earlier. The earlier families begin thinking about college cost, the better they can prepare.

With the new Prior-Prior-Year legislation, students can be admitted and institutions have the opportunity to begin awarding financial aid earlier; this means families will have more time to prepare for the cost of attending their students’ first-choice institutions. There is still uncertainty about whether or not the group of students who most need to apply earlier to colleges will do so, but they now have the ability to educate themselves with earlier information regarding cost. If these college students—particularly those with a high need for financial assistance—are willing to accelerate the college selection process and apply to colleges earlier, the college-going rate should increase.

What’s in the Package?

Not only is the amount of aid a significant factor, but the type of financial aid is also a critical piece to a student’s ability to enroll, persist and graduate from college.

As students with high financial need flock to college campuses, institutions are being forced to respond. Over three-quarters of the undergraduate students at four-year institutions received some form of financial aid in 2007 (Renn & Reason, 2013), and it is possible these numbers will increase. With flat or reduced financial support from federal and state sources of aid, institutions are stepping up to assist students who have financial need. We are seeing institutions in all higher education sectors—public and private institutions—investing or providing more institutional financial aid to students. From 2009-10, institutions reported an overall increase of 8 percent in net tuition revenue per student, but the net revenue gains for many campuses has drastically been reduced. In fall 2015, campuses reported only a 1.8 percent increase in net tuition revenue per student over the previous year (NACUBO, 2016). The loss in net tuition revenue gains is going back to students in the form of scholarships and grants.

If all factors are equal, students typically enroll (or re-enroll) at the postsecondary institution that offers the highest subsidies—scholarships, grants, or loans—that help offset the direct cost of college (Paulsen, 2001). A study by van der Klaauw estimated that a $1,000 merit award offer from a college to a student would increase the probability of attendance at that college by 2.8 to 3.8 percentage points (van der Klaauw, 2002). Mayhew’s and his colleagues’ research  (Mayhew, et al., 2016) supports Paulsen, van der Klaauw and others’ findings; these researchers also found that grants and scholarships promote retention, persistence, and graduation, in addition to less-compelling evidence that work-study and loans also bolster attainment. Work-study programs and virtually any type of loan are traditional pieces of a financial aid package that allow a campus to have a student have some “skin in the game.” Campuses must work to keep these two sources of financial aid to a minimum.

If colleges and universities don’t invest in providing forms in institutional gifts (merit or grant aid), students may rule out institutions based on their financial need. In the Ruffalo Noel Levitz 2016 rising senior report, 50 percent of respondents indicated that they ruled out colleges based on sticker price alone. This clearly illustrates that if an institution isn’t able to promote a strong commitment to helping students enroll and persist early in the recruitment process, there is a sector of students that simply won’t consider them (Ruffalo Noel Levitz, 2016).

Final thoughts

More American students than ever before are eager to obtain a college degree. Immediate college enrollment rates for high school completers has increased from 60 percent of all students in 1990 to 68 percent in 2014 (National Center for Education Statistics, 2016). As college costs continue to increase with stagnation from federal and state sources, colleges will continue to face the challenge of providing more financial aid to students.

Students have spoken. They have told us that they may rule out institutions simply based on the sticker price. The new Prior-Prior Year legislation means colleges and universities are now in a position to provide financial aid awards much earlier than ever before. Institutions need to find creative ways to help prospective students understand their missions, visions, and values. Not only is the mission, vision, and values important, but students and families now have heightened expectations about how their institution of choice will provide opportunities after college. Helping families see that institutions are truly trying to be a financial partner is imperative. Family expectations are higher than ever and institutions must continue to offer information about college financing. Once students apply and are admitted, colleges and universities must also provide timely and robust financial aid packages that deliver meaningful enrollment pathways for students.

Watch for our next post on Prior-Prior Year

My RNL colleague Todd White will be posting part two of this blog in a couple of weeks with some strategies for addressing financial aid and student engagement in a Prior-Prior Year environment.

Questions? Want to discuss your Prior-Prior Year strategy with an expert?

Call 800.876.1117 or email me to confidentially discuss any questions you may have regarding how your institution is addressing students’ concerns about affordability in today’s Prior-Prior Year environment. We’ll be happy to share with you how campuses similar to yours are responding as we listen carefully to your situation.


Cooperative Institutional Research Program. (2016). The American Freshman: National Norms Fall 2015. January.

Mayhew, M. J., Rockenbach, A. N., Bowman, N. A., Seifert, T. A., Wolniak, G. C., Pascarella, E. T., & Terenzini, P. T. (2016). How College Affects Students. San Francisco: Jossey-Bass.

NACUBO. (2016, May 16). National Association of College and University Business Officers.

National Center for Education Statistics. (2016, May). Immediate College Enrollment Rate.

National Center for Higher Education Management Systems. (2016, December 3). College-Going Rates of High School Graduates – Directly from High School.

Paulsen, M. B. (2001). The Finance of Higher Education: Theory, Research, Policy & Practice. New York: Agathon Press.

Perry, M. J. (2016, August 13). Do you hear that? It might be the growing sounds of pocketbooks snapping shut and the chickens coming home…..

Renn, K. A., & Reason, R. D. (2013). College Students in the United States. San Francisco: Jossey-Bass.

Ruffalo Noel Levitz. (2016). Rising Seniors’ Perceptions of Financial Aid. Cedar Rapids: Ruffalo Noel Levitz.

van der Klaauw, W. (2002). Estimating the Effect of Financial Aid Offers on College Enrollment: A Regression-Discontinuity Approach. International Economic Review, 1249-1288.

Van Der Werf, M., & Sabatier, G. (2009). The College of 2020: Students. Washington, D.C.: Chronicle Research Services.

Western Interstate Commission for Higher Education. (2016). Knocking at the College Door: Projections of High School Graduates.

About the Author

Wes Butterfield

Wes Butterfield oversees the financial aid services division of RNL. In addition to providing leadership for the division, he has served more than 40 small and large four-year public and private campuses across the United...

Read more about Wes's experience and expertise

Reach Wes by e-mail at Wes.Butterfield@RuffaloNL.com.

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