Shaping Aid Policy for Increasing Revenue: Examining Admission Status, Unmet Need, and Demographic Characteristics as Persistence Predictor

Increasing costs and discount rates and decreasing persistence have led to deteriorating net tuition revenue at many colleges and universities. The lack of clarity about the relationship between student persistence and incoming student characteristics was interfering with the development of optimal tuition discounting policy and required research. The purpose of this quantitative correlational study was to determine any predictive relationships between academic readiness, unmet financial need, and a set of demographic characteristics on college persistence, thereby creating a framework for shaping aid policy and increasing institutional net tuition. Secondary data from approximately 2750 students enrolled at Notre Dame College as degree seeking, first time, full-time freshmen between 2005 and 2014 comprised the sample. The predictor variables were admission status, unmet financial need, and a set of demographic characteristics including gender, race/ethnicity, home state, parental education, varsity athletics participation, and first year commuter status. The criterion variable was persistence, defined as the number of semesters the student remained enrolled at Notre Dame College. Data analysis consisted of binomial logistic regression and measured whether the student persisted to Year 3. Findings indicated significant relationships between Year 3 enrollment and academic readiness, unmet financial need, gender, race/ethnicity, state of residence, and first year living status; findings indicated no significant relationship with first-generation status and athletic participation. Recommendations with the potential for increasing net tuition through adjustments to overall aid policy and the development of an escalating aid plan for a targeted subset of students was offered. Also presented were recommendations for future research.