Outsourcing Archives

NACUBO annual meeting sessions and hey takeaways

4 Key Sessions and Takeaways from NACUBO 2023 Conference

July 21, 2023

By: Nicole Verrett, Vice President of Client Engagement & Martin Smith, Vice President of Campus Partnerships

During the 2023 NACUBO conference, we had the opportunity to attend many sessions that delved into the current challenges facing higher education. We will focus on four key sessions that stood out, highlighting their major takeaways from this year’s conference that will be invaluable for institutions as they navigate the challenges and opportunities that lie ahead in the 2023-2024 school year.

Break the Pandemic-Enrollment Cliff Doom Loop

This session addressed the pressing challenge faced by higher education institutions in regaining pre-pandemic enrollment levels. Attendees, including CFOs from various campuses, shared creative solutions that can prove instrumental in overcoming this hurdle. One notable strategy discussed was aligning technology investments with campus initiatives to enhance overall efficiency. Moreover, catering to the needs of underserved students emerged as a crucial aspect to drive enrollment growth.

Key Takeaway: Embracing Change to Enhance Efficiency

In the face of the enrollment cliff, higher education campuses must do more than rely on marketing alone to overcome the challenges. A comprehensive approach is crucial, with a focus on both program offerings and operational excellence. Robert Heil, CEO of FAS (Financial Aid Services), highlights four critical factors that demand increased attention as institutions brace for the enrollment cliff: College Going Rates, Centralizing Pathway Programs, Loss of Pricing Power, and the imminent Staffing Crisis affecting financial aid and student business operations. Embracing these necessary changes presents opportunities for growth and empowers institutions to navigate the obstacles posed by the evolving workforce landscape.

Higher Ed Workforce Challenges: Opportunity, Chaos, or Something in Between?

This session delved into the ongoing struggles of employee recruitment and retention in the higher education sector. Attendees gained insights into effective strategies employed by chief business officers and chief human resource officers to attract and retain talent in this highly competitive job market. One emerging solution discussed was outsourcing financial aid operations to streamline processes and improve overall efficiency.

Key Takeaway: Staffing Challenges Deserve Solutions

Higher education institutions across the nation are grappling with significant staffing challenges, especially in today’s competitive job market. Recruitment and retention of employees has become top priorities for campus leaders. As highlighted in our latest eBook “Challenges Deserve Solutions.” The National Association of Student Financial Aid Administrators (NASFAA) in March 2022, polled 500 institutions with a vast majority of universities today stating that they cannot find enough qualified applicants to fill open roles. To tackle this issue effectively, institutions should strategically align with like-minded partners to mitigate operational and staffing challenges

The Charter of a Post-Pandemic CFO: Supporting the Mission through Strategic Staffing

The third session emphasized the critical role that post-pandemic chief financial officers play in ensuring their institutions thrive despite economic uncertainties and declining enrollment numbers. Business officers must confront and embrace data to identify under-resourced areas of their institutions and unlock investments strategically. Additionally, leveraging the relationship between student employment and student success can further support institutional efficiencies and financial sustainability.

Key Takeaway: Collaboration and Data-Driven Decisions

CFOs need to collaborate closely with Financial Aid Officers (FAO) to navigate through upcoming changes effectively. By creating streamlined systems and processes, institutions can adapt to the evolving higher education landscape. Furthermore, data-driven decisions will be instrumental in overcoming financial challenges and breaking the stigma of the “budget blocker.”

Building Bridges to Help Our Students: Partnering Student Accounts and Financial Aid

This session centered around student support services, highlighting the need for optimizing Financial Aid Officers (FAO) and Student Business Services (SBS) with one-stop shops and comprehensive office assessments. Ensuring the best possible support for students remains a top priority for higher education institutions.

Key Takeaway: Prioritizing Student Support

Students come first, always. In our latest comprehensive report, the norms expected by today’s students have been formed by their experience as voracious consumers in a marketplace defined by a multitude of on-demand eCommerce and entertainment experiences. Institutions must prioritize student support services to enhance the overall experience of their students. By building bridges between Student Accounts and Financial Aid, institutions can create a seamless support system that caters to the needs of their student population.

The NACUBO conference provided us with great insights into the challenges and opportunities within higher education and how FAS can further support institutions. The key takeaways from these sessions will undoubtedly guide institutions and stakeholders in navigating the ever-evolving landscape of higher education. By embracing innovative solutions, collaborating, and making data-driven decisions, we can collectively support the success of both institutions and students on their educational journey. Challenges deserve solutions, and with the lessons learned at NACUBO, we are better equipped to overcome them.

The Looming Enrollment Cliff

June 5, 2023

By: Robert Heil, CEO

You are likely aware of the impending enrollment cliff expected to hit higher education soon. The cliff is a demographic trend resulting from a decline in the number of high school graduates in the early 2000s, Now that those students are reaching college-age, the metrics are clear – many college seats available, not nearly enough students to fill them all.

Preparing for the looming cliff is a central topic in higher education meetings, conferences, and webinars. Too often, these meetings revolve around the conventional go-to topics: diversifying revenue streams, exploring non-traditional and graduate programs, targeting specific markets, increasing financial aid, improving recruitment strategies, and boosting retention rates. While these aspects are undoubtedly important, they have always been on the radar. These initiatives matter but haven’t these always been priorities? The question now is: What is it about the impending cliff that makes these new?

Campuses cannot simply market their way around the cliff. A comprehensive solution is required, which means programs and operational excellence are equally important. As I meet with college and university Presidents and their Boards, leaders in Washington DC, and in the EdTech sector, I noticed 4 factors that warrant more attention when preparing for the enrollment cliff.

College-Going Rates in Your Market is a Metric You Need to Know:

The college-going rate is the number of higher school graduates who enroll in college. It is critical that you know these rates throughout your markets. Everyone is aware of the national demographics. Not as many campuses are paying close attention to the college-going rates in their primary and secondary markets. Are those rates increasing or decreasing in your markets? What are the projections in the coming years? These rates will either increase or mitigate the severity of the cliff you experience.

Historically, higher education weathered these demographic storms by relying on an increase in the college-going rate. What makes this particular cliff so concerning is that we may not have the luxury of relying on higher college-going rates. The cliff reality could be made even steeper by a segment of students and families that are giving up or doubting the ROI of higher education. Career opportunities are drawing students into the world of work directly out of higher school.

Alternative online credentials are luring others away from traditional degree programs. COVID had a short and long-term impact on the learning experience. Unfortunately, more students and families now question the value of college and are exploring new routes to learning and career outcomes. This value question was under scrutiny already due to rising costs in tuition and student loan debt; however, it appears to have gained momentum post-COVID and could impact college-going rates. Keep reading. You can do something about this.

Pathways Need to Be Central to Your Strategy:

Creating opportunities for high school students to experience your campus earlier will create an advantage. More dual enrollment programs, weekend coding boot camps, literature events, athletic camps, gaming contests, performing arts programs, mock trial coaching events, and shark-tank business projects are just a few examples of where you might invest. Align those immersive experiences with academic or extra-curricular programs you are confident will drive growth for your campus.

Do not overlook transfer agreements with community colleges in your primary and secondary markets either. The development of pathway programs benefits everyone. You drive more demand while influencing the college-going rates in your primary and secondary markets.

Pathways are important priorities for legislatures at the state and federal levels; you may discover funding sources exist, too. You are not going to market your way around the cliff with simply more direct marketing and social media strategies. Pathway programs are key to the solution and benefit everyone.

You Will Lose Pricing Power:

NACUBO recently released their Tuition Discounting Study. The average institutional tuition discounting rate increased to a record 56.2% for first-time undergraduates. These rates already raise questions about how sustainable these discount rates are for most institutions. Unfortunately, the impending cliff will only add significant downward pressure on tuition pricing. While this may signal good news for students and families, it means noticeably less tuition revenue for many colleges and universities, making many campuses particularly vulnerable.

To combat this, make sure you are maximizing your financial aid strategy and operations. It is not just your leveraging strategy, but your financial aid operations and processes too. How timely are your award offers? What are your turnaround times on the key steps of the financial aid process? Wait time? Are you staffed appropriately? Does your process create a seamless and convenient experience for students and their families? When considering financial aid, it is not just about the money. A great experience speaks volumes about the value of your campus. No amount of marketing will offset a poor process or experience.

What Happens When the Enrollment Cliff Meets Higher Ed’s Staffing Crisis?

While COVID accelerated staff vacancies and hiring challenges, the root causes existed pre-pandemic. Today’s staff vacancies and hiring challenges show no signs of letting up anytime soon, pushing many campuses to re-imagine their operating models. This is particularly important for financial aid offices that influence the student experience and are on the front lines of combating the impact of the enrollment cliff. A 2022 survey conducted by The Chronicle and P3.EDU indicated 71% of campuses are outsourcing more of their operations to strategic partners.

Our most recent eCity and FAS (Financial Aid Services) industry survey mirrored equivalent results when asked about financial aid operations. The primary contributing factor is to create a model where the strategic partner can do what they do best and free up the financial aid staff to do what they do best. That is a model that benefits both the students and your campus. Staff retention is important to this conversation, too. If you want to retain your students- retain your staff. When you do lose staff members, rely on interim staffing to stem the tide until you can backfill those positions. This limits operational disruption and protects your compliance, enrollment goals, and student experience.

Challenges Deserve Solutions:

The enrollment cliff presents a significant challenge for colleges and universities, but it is not insurmountable. Our team believes challenges deserve solutions. It is a guiding principle at FAS. The good news? These challenges have solutions. They come from creating new pathways, empowering your existing team, and applying new operating models and partnerships alongside enrollment management strategies. Combined, these create a framework for a comprehensive solution that benefits students and your campus. The right solution always benefits both.

Want to learn more about what FAS can do for your institution? Reach out here to start a conversation and learn more about our services. You can watch our service videos or reach out for a 20-minute quick consultation.

Reap the Benefits of Outsourcing

January 24, 2023

By: Jennifer Vaden, Student Business Services (SBS) Consultant

Many institutions have been feeling the pinch since the pandemic hit, with resource scarcity becoming commonplace. The question of how to accomplish more with less is getting tougher to answer. Meanwhile, students and parents expect a high level of service and support. This has created an environment in which colleges and universities must be creative with the financial and human resources we have to meet student and parent demands. Now is the time to reap the benefits of outsourcing.

Outsourcing a service to a third-party vendor can position an institution to improve operational efficiency, reduce overall costs, and enhance flexibility for its employees. Even though the word “outsourcing” may elicit a negative reaction as some inevitably link it to the act of laying off workers, outsourcing does not have to be all or nothing. Outsourcing can be approached as a partnership utilizing both institutional and third-party resources to significantly improve a service that is vital to students and parents. Many shared student services teams have embraced these partnerships to better meet customer service demands.

The first step is to assess which operational tasks, such as customer service, credit balance refunds, or financial aid verification, may be good candidates for outsourcing. Before exploring a partnership, however, it is imperative to start with what you know, namely, what is your data telling you. Achieving a high level of service and operational efficiency often requires a deep understanding of trends in volume, needs, and student and parent behavior as well as the productivity and capacity of your employees to meet those service demands. Today’s students live in an on-demand world in which waiting more than five seconds to receive a response can feel like a lifetime. Students and parents expect shorter wait times as they believe that the service level should be commensurate with the high costs associated with attending an institution of higher learning.

At one private four-year research institution, the business peaks align with the start of the Fall and Spring semesters, registration periods, and our yield season in April. Outside of these peak times, student and parent service demands tend to level out considerably. This presents a staffing conundrum. During peak times, far more staff are needed than are currently employed on the team to meet the higher demand for our services; however, in non-peak times, current internal staffing levels can meet the lower demand. Based on a thorough data analysis, it was clear that supplement staffing was needed for phone coverage. This would lower wait times and reduce complaints that sometimes were escalated to senior staff or even the presidential level.

Consequently, the institution engaged a third-party vendor to manage incoming calls rather than hiring additional benefited (W2) employees. The specific department was designed or resourced to staff seasonally whereas third-party vendors and servicers specialize in staffing for shifts in volume and activity. A third-party vendor can help you reach an optimal level of staffing to meet operational needs during the high, and shoulder, seasons.

Given the financial constraints facing many institutions, outsourcing a service is a decision worth considering especially if the demand for that service fluctuates throughout the academic year. The internal costs to hire, train, and retain benefited employees can be substantial. Budgetarily, direct costs to cover salary and fringe benefits for additional staff positions can add up rather quickly, making it more difficult to obtain the funding required to meet demands.

Outsourcing can be a viable alternative. The cost of a contract with a third-party vendor should typically be less than what an institution would need to budget to hire internally to meet the demand during peak times. In the instance mentioned above, the annual cost equates to approximately four internal frontline staff positions. However, the third-party vendor easily scales the staffing coverage beyond four positions to easily meet peak season demands. Bringing the service back in-house would cost nearly twice as much and result in overstaffing outside of peak times.

When factoring in the time and allocation of managerial staff to onboard and train new employees, the indirect costs quickly mount up. Moreover, complex learning curves often create situations where new employees are not able to significantly contribute for some time, requiring current employees to pick up the slack. This can increase burnout among current employees.

In this case, the third-party vendor is responsible for hiring, onboarding, and training their staff to support the client’s institutional needs. The institution supports the vendor as needed to ensure the content and quality are up to standards. This arrangement generally frees up managers to focus on more pressing service issues and reduces the burden that would otherwise fall on current employees. Considering the direct and indirect costs, outsourcing is a pragmatic solution.

Establishing a partnership with a third-party vendor can also provide you with the flexibility to focus on more than just day-to-day operational needs. There are important nonoperational needs that require managers to take their teams offline. Meetings, staff training and development, and campus events are a few of the reasons that operations may need to close temporarily. With a third-party vendor, operations can continue uninterrupted while you can dedicate time to grow and support your staff members. This flexibility benefits the leadership level as well. You now have the bandwidth to focus on the greater vision for the student experience because operational needs are being met efficiently and effectively.

Consider outsourcing operational needs to a third-party vendor when the data suggests it’s a smart option and your leadership asks you to be more creative with resources. Achieving cost savings, enhancing efficiency, maintaining compliance, and boosting flexibility are only a few of the benefits that await you when you embrace outsourcing as a viable solution.

If you’re just beginning to consider outsourcing, pinpoint the most time-consuming tasks. What takes your staff’s attention away from direct service to students? Most often, it’s back-office processes ranging from the Return of Title IV Funds (R2T4) to reconciliation and verification. All these functions are required by federal regulations. Outsourcing them to a trusted partner gives you peace of mind that you’re in compliance and the added efficiencies give you a real operational advantage. Contact FAS to learn how outsourcing is key to strengthening financial operations, optimizing enrollment, and enhancing the student experience.

Administrative Capability, a Mammoth Challenge in Financial Aid’s Staffing Crisis

November 17, 2022

By: Bob Covey-Robbins, Consultant

What does it mean for an institution of higher education to be administratively capable? Why is it important? Whose job is it to ensure that a school complies with administrative capability requirements?

Administrative capability is carefully evaluated when a school’s application for certification or re-certification is reviewed by the Department of Education. The school must demonstrate administrative capability. 34CFR§668.16 extensively outlines the conditions for administrative capability. In short, it means that the institution has the people, expertise, systems, technology, policies, and procedures to effectively manage Federal Student Aid programs.

The institution must designate someone to be responsible for administering FSA programs, but it also must ensure that the person is supported by an adequate number of staff needed to effectively administer the programs. There is no specific formula for determining the number of staff needed. It must be determined by the number of students applying for financial aid, the various financial aid programs the school administers, the technology used, and how much administration is automated.

Many schools are currently struggling to maintain an adequate number of staff to remain in compliance with the daunting number of Title IV statutory and regulatory requirements. According to a US Chamber of Commerce article, today, there are 2.9 million fewer people in the workforce than there were in February 2020, and even if every unemployed person were to gain employment, there would still be a labor shortage (Ferguson, 2022).

Has the financial aid office workload lessened with declining enrollment? Many would say that it has actually increased since the COVID-19 pandemic started. Expanding the modality of financial aid counseling to include remote advising, administering HEERF funds with its frequent changes in federal guidance and reporting requirements, and more recently, the addition of Fresh Start student loan default relief. The number of students seeking a Fresh Start at a school can bring a significant increase to the financial aid office workload.

Declining enrollment has led to decreases in operating budgets, making it even more difficult to retain valuable staff as more attractive employment opportunities arise outside of higher education administration. Creating entry-level financial aid office positions may add staff, but those staff need extensive training, supervision, and coaching as they become proficient in their new role. For many schools, the cost of new aid officer training programs offered by state, regional, and national associations is out of reach.

The harsh reality for many financial aid offices is that they are facing the perfect storm of increased demand for services, staffing vacancies, continuous audit pressures, shrinking budgets, and, ultimately, concern about maintaining the school’s eligibility to participate in federal student aid programs.

To provide the needed services to help families with financing higher education, while maintaining legislative and regulatory compliance, more schools are seeking interim staffing solutions. Services can range from filling a financial aid director’s role to outsourcing daily financial aid processing tasks. For many schools, using a trusted partner for interim staffing and outsourcing processing tasks provides a more cost-effective means to providing quality student service, while maintaining compliance and making a valuable contribution to the school’s enrollment management efforts.

Outsourcing Financial Aid: A Better Economic, Strategic, and Student-Centered Model

October 12, 2022

Processing financial aid records is one the most important yet complex steps for many financial aid offices. When not administered correctly or efficiently, it can create compliance risk or delays in students receiving their awards which has real enrollment and financial consequences. The recent staffing shortages throughout the industry have only magnified these challenges.

Many university presidents and CFO’s are exploring a new model – outsourcing their financial aid processing services. Those university leaders are discovering outsourcing is a better model for 4 reasons.

It is a better economic model. University leaders can better control their costs in an outsourced model rather than carrying high costs associated with large staffs with frequent turnover. In addition to the cost savings, an outsourced processing model creates greater ROI. When financial aid is administered sooner, students receive their awards earlier which creates a real recruiting and retention advantage. Even a 2% gain in admit yield or a 2% increase in retention equates to noticeable gains in headcount and significant gains in net tuition revenue. The cost savings combined with greater ROI is why university leaders are discovering the outsourced partnership is a better economic model.
It is a better strategic model. When the back office processing work is outsourced, financial aid staff are unconstrained to do what they do best – counsel students and parents. Key financial aid staff can focus on higher priority strategic initiatives that achieve operational, enrollment, and student experience goals. Those strategic priorities make a significant impact on the university.
Students are better served. When financial aid files are processed sooner, students receive their financial aid awards earlier increasing their propensity to enroll as new students or return as current students. Parents and family members are more engaged and satisfied in the process. Student experience is directly correlated to recruitment and retention. Most financial aid leaders entered the profession, in the first place, to help make college affordable and accessible and to serve students. This model supports that goal.
Peace of mind that the university is always in compliance. Besides the benefits of timely and accurate financial aid administration, university leaders who find a trusted strategic partner can rest assured their financial aid is administered in full compliance with the Department of Education.

Important factors to consider

As a best practice, have the outsourced processing work completed in your student information and financial aid management system. Select a partner that is experienced and proficient in your technology system.
Find a partner with deep industry experience and a long-standing track record of success with their clients and who is fortified by highly experienced consultants and team members. These are the strategic partners you want.
Ask potential partners about their audit history. Those companies are audited each year just like universities.
Ask potential partners about their quality control measures and processes. The best companies will quickly respond, providing the detailed quality control measures they have in place to ensure full compliance.
Inquire whether the outsourced partner will just replicate your current processes or will they listen and work with you to make your current processes more efficient. Will they merge their best practices with your client-specific needs? If so, that is a good partnership.

At FAS, these are a few of the tenets and best practices we built our model on.

Final thoughts

Financial aid processing is one of the most important steps in a financial aid operation. The current staffing struggles in most financial aid offices only makes this more challenging. Those staffing challenges show no signs of lessening anytime soon. But there is an alternative. It’s a better model too. From the initial application until the last dollar is disbursed, the right outsourced partner will make a significant impact on your financial, operational, and student experience goals.

Welcome to FAS’ Consulting Corner

September 30, 2022

Welcome to FAS’ Consulting Corner! In conjunction with launching our new website, we want to use this space to share relevant information with financial aid and student business services practitioners. It’s a safe and reliable place to get the latest news on what’s happening in financial aid and student finance all around the country. We’ll tackle issues from maintaining rigorous compliance standards and leveraging technology, to giving your students the best possible experience. Our consultants are thought leaders with a combined 1,600 years of experience in their respective fields. Higher Education is an industry that’s always in motion. There is always something new to talk about, so check back often. We’re adding fresh content all the time. Whether you’re considering services, need guidance or resources, or just want to connect with FAS, we’ve got something for you.

What’s In The Numbers

March 22, 2019

In over 31 years, we have seen many trends in higher education that were shaped by financial aid. Each year, students go through the application process. Unfortunately, hundreds of those students never go any further. Financial aid offices typically send a request for information but do not actively recruit these students. Data we have monitored for several years shows a direct correlation between early action and high interest level. Students who respond quickly to a financial aid information request, even from a college where they haven’t applied or been admitted, are expressing excitement about the institution.

Also, some colleges have measures financial aid applicants must take beyond the federal requirements. Recent research suggests the result is fewer students enrolling and a heightened possibility of non-compliance with the federal regulations. For colleges that award a significant amount of institutional aid, additional information may be necessary. If a college primarily offers federal grants, loans and student employment, using standard federal requirements has multiple benefits. This simplifies the process for the students and helps to eliminate access barriers. It also reduces the possible liabilities associated with extraneous and conflicting information. FAS works closely with our clients to help administer financial aid in a manner that is compliant and student-friendly. Contact us about assessing. your overall process or to discuss offloading some of the most time consuming parts of your operation.

VCFA and FAS: A Well-Oiled Financial Aid Machine

November 6, 2018

Challenge
Nestled on a hill overlooking picturesque Montpelier, Vermont College of Fine Arts (VCFA) offers artists and writers a transformative, progressive graduate education experience through its master of fine arts programs and unique master of arts program in art and design education. In 2008, VCFA acquired its historic Vermont College campus and three master of fine arts programs from Union Institute & University in Cincinnati, which had owned the campus since 2001. After the transaction, VCFA turned to FAS to administer its student financial aid.

Solution
“We never had a stationary moment since we became independent,” said VCFA Controller/Bursar Katie Gustafson. “It’s an incredibly dynamic place, whether we’re adding new programs for our 360 students or starting a fund raising campaign to renovate our buildings.” The college signed its first contract with FAS in 2008 to help implement its own financial aid process. Gustafson noted that for a period of time, the college had discussed bringing its financial aid in-house. “But as FAS and VCFA grew together, we saw that students were incredibly well-served,” she said.
“FAS is very good at decreasing the stress level among students and helping them understand how financial aid works.”

Results
FAS Manager of Full Service Wanda McLaughlin and FAS Client Services Manager Daphne Parks worked closely with Gustafson to provide comprehensive financial aid remote processing. “Everything they do is so efficient,” said Gustafson. “We’ve had clean compliance audits every year, and it doesn’t get any better than that.” Every year, the trio reviews and tweaks processes to make sure that everything is working well. “We have a well-oiled machine,” Gustafson said. “While we are different from any other school, FAS’s willingness to engage with us in our culture is admirable. I think that’s what the broad FAS mission is all about. Any school would be smart to consider working with FAS, but nobody can have Wanda or Daphne!”

4 Key Sessions and Takeaways from NACUBO 2023 Conference

The Looming Enrollment Cliff

Reap the Benefits of Outsourcing

Administrative Capability, a Mammoth Challenge in Financial Aid’s Staffing Crisis

Outsourcing Financial Aid: A Better Economic, Strategic, and Student-Centered Model

Welcome to FAS’ Consulting Corner

What’s In The Numbers

VCFA and FAS: A Well-Oiled Financial Aid Machine

Why FAS?

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