Communication is Key to Addressing Default and Financial Aid Issues

Thought Leadership SEMinars, by:

What would you do to lower your school’s default rate
and increase the effectiveness of your financial aid program?

Leo Kornfeld was a guest on the monthly Thought Leadership SEMinar hosted monthly by EMAS Pro to talk about exactly this question. With national default rates in the 20% to 25% range for many schools, this is a serious problem (1P).

Leo Kornfeld is considered an expert in the area of financial aid. Mr. Kornfeld, Presidential appointee during the Carter and Clinton administrations and Deputy Commissioner for the Student Financial Aid Program. Mr. Kornfeld served senior executive positions in various corporations, including Citicorp and Automatic Data Processing. He serves as a Member of Advisory Board at mscripts, LLC. He has served as a Director of Education Lending Group Inc. since 2001. He is also responsible for the origination of the student financial aid program. The SEMinar he recently presented was directed at financial aid and addressing the high default rates seen in recent years by students in the student based loan programs.

Kornfeld’s advice was very interesting. He did not talk about dollars, the students who are not prepared to achieve, or the schools who existed only because they awarded a lot of aid.

Rather, he focused on communication. He said the main opportunity to improve the impact and success of financial aid programs and lower default rates is to have better communication for all parties — students, parents, faculty, staff and others. In other words, schools and students with student loan default issues have a giant communication problem!

Given all of the communication channels available these days, Kornfeld argued that we are not doing a good job in communicating with students and all those who address the cost of college or university experience. Taking responsibility for more than just ourselves, he argued that we need to look carefully at our overall communication effort, the content of the materials, and the communication channels we use.

This is more than just talking. It involves every channel that we use to communicate, provide information on financial aid, and to work with the students’ understanding what is involved in taking on a student loan. At the same time, the value of the school must be built as the students who value the educational opportunity will be more likely to remain in good standing with the financial aid awarded to them.

We can’t speak to the government or the lending agencies, but we do know something about the higher ed arena. So, how can we help you take Kornfeld’s thought provoking message and make it practical? We offer the following four suggestions:

How, What and When to Communicate
and Train for Relationship Management

The following chart represents the options open to schools in communication with students and their influentials.

Communication options to students and the influentials

How to Communicate – Contact Type
The yellow circles represent the number of students addressed. As one comes down the path from bigger to smaller populations, the communication becomes more frequent and more personal. In this approach, the first communication variable is type of contact. Financial aid information can be conveyed through any of the channels.

The main question here is “What channel will be used for each contact?” A unique pattern of contacts by the school is needed for each step. As one moves down the system from inquiry to enrolled, more and more personal contact is needed. The one thing that we can be sure of is that the use of email, telephone, and letters will not be enough. Also we know that the communication channels used will be different depending on the age of the potential student. The older students may not react well to emails and Facebook use and may require more personal contacts such as phone or the use of activities to get them to the campus.

What to Communicate – Content
The second key communication variable to consider is the content of the communication. Questions schools want to ask students to consider are: “Why is it important to consider going further for your education and why at this school?  How can financial aid help you get the benefits the school offers? What are those benefits? In this case, be sure that the messages reflect the concern and status of the potential or present student. Know what you should be saying in each contact with the student.

The content changes as the communication moves from inquiry to enrolled. Typically, this moves from general statements about quality or programs to very personal messages and communications using faculty, students, and alumni to illustrate points about programs. For the topic of this blog, the content for financial aid changes from what is available to addressing the conditions attached to and a part of the students’ commitment.

In all of your content work, the guiding theme is to demonstrate the value that makes your school worth the investment.  The challenge is that the value varies from student to student. You will start with content that is relatively generic and it will get more targeted as the student moves down the pathway from inquiry to enrollment. Value can be expressed in brochures, cards, web sites, but must be shown and talked about in personal contacts such as high school visits, phone calls, presentations. It can be expressed in brochures and documents but, in the end, you will need to have personal contacts with the potential student that says value to the student and influentials. If the students do not perceive the value of your school to be high, the choice to enroll in your school becomes more about the availability of financial aid and not academic achievement. As a result, higher default rates follow.

In many cases, the value is apparent from the start. Notre Dame, Alabama, and the University of California are all brands that carry inherent value. Community colleges and less known four year schools often have to start from a low level of perceived value in building their brand with each and every student.

When to Communicate – Frequency
is another important communication variable. Generally, schools need to communicate more often with the right content and the right contacts. The use of Facebook, Twitter, Linked In and other social network programs make the frequency issue easier. While brochures and cards may be used initially, the use of social network programs becomes important at the acceptance stage and beyond. As long as the student still sees value in your school and the content of the communication is appropriate and interesting, frequency is better overdone than underdone. Be sure to have a system that can track student responses to your social network outreaches.

Training in Relationship Management
In the issues of communication for schools, it is very important that the contact people at all levels are trained to work with the student. This is a type of communication that is defined as relationship management. The contacts are meant to help the student and influentials make the right decisions. The contact person must know the school or the program and use some time to find out about the student. This is the way that you get to know what your school has that is of value to the student. If you have value, it is high to go on in the enrollment process. If you do not have value, the best thing may be to help the student find another school.

The skills needed in the process are good listening and a capacity to put the student and influentials at ease. The knowledge required is the area of the school and in the area of financial aid and how to address costs. The representative must identify the driving forces for the student to enroll and the restraining forces that might make them choose not to enroll at your school. Addressing cost may likely be one of the restraining forces. This cannot always be addressed by more money but by increasing the students’ perception that the school is worth the cost.

( 1 ) Federal Student Aid: U.S. Department of Education

For more information on Leo Kornfeld, go to

Copyright ©2013 Drs Ron & Dori Ingersoll and EMAS Pro
Learn More About the Thought Leadership SEMinar Series


    Leave a Comment

    Your email address will not be published. Required fields are marked *