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The Rise of the Informed Consumer and Student Return on Investment Todd Bloom, Ph.D. November 5, 2012
The Rise of the Informed Consumer and Student Return on Investment
Todd Bloom, Ph.D.
November 5, 2012
Welcome & Overview
The Higher Education Marketplace
Overview of Students’ College Attendance Decisions
A Closer Look at Choices and Choice Process
A Closer Look at Information
Student Return on Investment Framework
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Impacting Students & Institutions
3
4
Impacting Students & Institutions
Plan & Learn
Student SuccessInstitutional
Effectiveness
VIRTUAL STUDENT FAIRS
Who am I?
My aspirations?
What’s my path?
Who are our students?
Who is struggling/succee
ding?
How to intervene?
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Impacting Students & Institutions
Engage & Enroll
Student SuccessInstitutional
Effectiveness
DIGITAL MARKETING (HE)
PRINT MARKETING (HE)
CONNECT
Where do I go?
What info do I need?
Who will support me?
How do we best reach students?
How do we get a best fit?
How do we ensure a great start?
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Impacting Students & Institutions
Progress & Succeed
Student SuccessInstitutional
Effectiveness
How am I doing versus my goal?
How do I get help?
What next?
Are student supports working?
Are they on-track?
Where are they now?
The Higher Education Marketplace
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What are these buyers’ preferences and requirements?
17.6 M undergrads in U.S. higher ed today:
32%
Work full-time
36%
Graduate in 4 yrs
37%
Enroll part-time
Factors that Impact the Higher Education Marketplace
Demography
Fewer high school graduates nationally
Demographic shifts having different impacts in different parts of the country
Greater racial and ethnic diversity….
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McGee, Jon, (2012). Disruptive Adaptation: The New Market for Higher Education. Eden Prairie, MN: Lawlor Perspective.
Factors that Impact the Higher Education Marketplace
K-12 student demographics (2010 to 2020) flat for students who are White; Black;
increase 25% for students who are Hispanic;
increase 36% for students who are Asian/Pacific Islander
increase 17% for students who are American Indian/Alaska Native
HE student demographics (2010 to 2020)flat for students who are White; American Indian/Alaska Native
increase 25% for students who are Black;
increase 46% for students who are Hispanic;
increase 25% for students who are Asian/Pacific Islander10
Factors that Impact the Higher Education Marketplace
Unemployment
Affected all types of families during recession
Continues to influence economic behavior & choices
Family income
Median income now similar to 1996
Real income declined for all family types
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McGee, Jon, (2012). Disruptive Adaptation: The New Market for Higher Education. Eden Prairie, MN: Lawlor Perspective.
Factors that Impact the Higher Education Marketplace
Home values
Source of financial risk for many families
An anchor to mobility
Family debt and savings
Families change in habits during recession (saved more)
Will those habits stick?
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McGee, Jon, (2012). Disruptive Adaptation: The New Market for Higher Education. Eden Prairie, MN: Lawlor Perspective.
Factors that Impact the Higher Education Marketplace
What other macro factors do you believe are dramatically influencing the higher education marketplace and how?
Partner, Discuss, Share
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Overview of Students’ College Attendance Decisions
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When making economic decisions…
“A consumer is making a choice to maximize expected utility or minimize expected cost.”
Hal R. Varian,Berkeley Economist
people.ischool.berkeley.edu/~hal/Papers/sigir/sigir.html
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When making decisions about attending college…
Students compare the costs of college with expected income gains and other benefits.
Office of the Under Secretary, U.S. Department of Education. (1998). Factors Related to College Enrollment. Washington, DC: The Department.
College Attendance Decisions
Charles F. Manski & David A. Wise’s five factors that are most associated with enrollment:
1. Academic aptitude
2. Family income
3. Cost and aid
4. Quality of high school
5. Labor market conditions
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theop.princeton.edu/reports/wp/Fletcher%20THEOP.pdf
College Attendance Decisions
Other important factors in a student’s decision to enroll, such as:
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The decisions of peers
theop.princeton.edu/reports/wp/Fletcher%20THEOP.pdf
Family expectations
College Attendance Decisions
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Some students are early adopters, who assume from an early age that they will go to college. Their decision is where to attend.
Other students make an intentional decision in middle or high school that they will go to college. Where to go is their next decision, which tends to be based on resources, academic achievement, and other traditional factors.
theop.princeton.edu/reports/forthcoming/ANNALS_03_Grodsky,Riegle-Crumb_Manuscript_June2009.pdf
College Attendance Decisions
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When making decisions about attending college…
What other factors do students consider?
Partner, Discuss, Share
A Closer Look at Choices and the Choice Process
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Students have more choices than ever…
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TRADE SCHOOL?FOR-PROFIT?
LIBERAL ARTS?
ONLINE? BLENDED LEARNING?
MOOC?
IN-STATE?OUT-OF-STATE?
FOUR-YEAR?TWO-YEAR?
PUBLIC?PRIVATE?
Number of Degree-Granting Institutions in the U.S.
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1,274
1,957
1980-1981 – 3,231 Colleges
2-yr colleges4-yr college
nces.ed.gov/fastfacts/display.asp?id=84
Number of Degree-Granting Institutions in the U.S.
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1,721
2,774
2009-2010 – 4,495 Colleges
2-yr colleges4-yr. colleges
nces.ed.gov/fastfacts/display.asp?id=84
Can people have too much choice?
Study #1 - The Jam Study:
Researchers set up two tasting booths for jam – one with 24 different flavors and one with 6
60% of customers went to the booth with 24 choices, and 40% went to the booth with 6 choices
30% of the customers with 6 options bought jam, while only 3% of the customers with 24 options made a purchase
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Iyengar, Sheena S., & Lepper, Mark R. (2000). When Choice Is Demotivating: Can One Desire Too Much of a Good Thing? Journal of Personality and Social Psychology, 79(6), 995-1006.
Can people have too much choice?
Study #2:
Students in an introductory college-level course were given the option of writing an extra credit essay.
Half the students were given a list of 30 possible topics, the other half a list of 6.
Students with the list of 6 topics were more likely to write the essay than the group given the list of 30.
Students given fewer choices for topics wrote higher quality essays.
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Iyengar, Sheena S., & Lepper, Mark R. (2000). When Choice Is Demotivating: Can One Desire Too Much of a Good Thing? Journal of Personality and Social Psychology, 79(6), 995-1006.
Can people have too much choice?
Study #3:
Customers chose chocolates either from a display of 30 or 6.
Customers reported greater enjoyment selecting from the display of 30 chocolates.
Later, however, customers who selected from the display of 30 chocolates were more dissatisfied and regretful of their choices than the customers who chose from the display of 6 chocolates.
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Iyengar, Sheena S., & Lepper, Mark R. (2000). When Choice Is Demotivating: Can One Desire Too Much of a Good Thing? Journal of Personality and Social Psychology, 79(6), 995-1006.
Can people have too much choice?
Conclusions:
Having extensive choices in a trivial context can be de-motivating (perhaps even more so in the context of significant decisions).
The only context in which people are more comfortable with extensive choice is when they have previous experience with some of the options.
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Iyengar, Sheena S., & Lepper, Mark R. (2000). When Choice Is Demotivating: Can One Desire Too Much of a Good Thing? Journal of Personality and Social Psychology, 79(6), 995-1006.
Can people have too much choice?
Information can add to the problems of choice overload:
Too much
Varying quality
Too little
Trustworthiness
But high quality information can overcome the negatives of choice overload.
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www.nytimes.com/2010/02/27/your-money/27shortcuts.html?_r=0
A Closer Look at Information
Where do students turn for information about college choice?
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Peers:One study showed that conversations with friends increase the probability of college enrollment. But if a student’s preferred college isn’t popular with peers, the student is less likely to enroll in that particular college.
theop.princeton.edu/reports/wp/Fletcher%20THEOP.pdf
School Counselors & Admission Officers:College choice can be shaped by data. In one study, providing graduation data increased enrollment by 15% in the college with the higher graduation rate.
www.aei.org/papers/education/k-12/filling-in-the-blanks/
Where do students turn for information about college choice?
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Online Tools:
http://www.nasfaa.org/WorkArea/linkit.aspx?LinkIdentifier=ID&ItemID=10761
Where do students turn for information about college choice?
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Online Tools:
Image from www.mmm.edu/become/aid/options/index.html/
Where do students turn for information about college choice?
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Online Tools:
studentloans.gov/myDirectLoan/financialAwarenessCounselingLanding.action
Where do students turn for information about college choice?
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Online Tools:
www.consumerfinance.gov/payingforcollege/Image from http://money.cnn.com/2012/04/11/pf/college/consumer_bureau_student_loans/index.htm
Student Return on Investment Framework
Assessing Return on Investment
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What information should students know when making decisions about college?
Assessing Return on Investment
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What do you think?
Please discuss in small groups:• What are good measures of student
return on investment? Consider…o Student Body Profileo Finances & Financial Aido Alumni Profile
• What other categories and measures would you add?
Report back to whole group
Assessing Return on Investment
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Student Body Profile
4 yr graduation rate?
Average GPA?
Average GPA in major?
Levels of student engagement?
Quality of career placement?
Retention rate?
% participating in international
study?
Levels of civic engagement?
Assessing Return on Investment
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Finances & Financial Aid
What are tuition & fees?
Amount of need-based awards?
Amount of non-need-based
awards?
Average student loan amount?
% of students with loans?
Loan default rate?
Assessing Return on Investment
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Alumni Profile
Levels of satisfaction?
% who go on to graduate study?
Rates of career placement?
Rate of alumni giving?
Levels of civic engagement?
Assessing Return on Investment
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What factors are most important to the student?
Please discuss in small groups:• Prioritize the factors – rank order
• Distribute 100 points among the factors
Report back to whole group
Assessing Return on Investment
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What is the value to institutions in reporting an SROI to students?
Please discuss in small groups:• How might the institution change what it
offers students?
• How might you do your work differently, if at all?
Report back to whole group
SROI
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Are you interested in continuing this conversation?
Hobsons is interested…
Assembling group of interested institutions in developing an SROI index. Contact me for more information.
