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Benchmarking Breakthrough

October 2015

By Derek Price

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An online tool from the Looking Under the Hood project allows institutions to use benchmarks to compare and consider institutional aid policies, overcoming a significant barrier for CBOs.

How much is an institution spending on total institutional grant aid per FTE undergraduate? What percentage of institutional grant aid is awarded based on students’ financial needs? What is the net tuition revenue (gross tuition minus grant aid) per FTE undergraduate? These are some of the key policy questions concerning institutional aid distribution that are addressed in the Looking Under the Hood Institutional Aid Metrics project, which was launched in 2012 to provide campus leaders with a better way of understanding the effects of their aid decisions on institutional budgets. An article, “Matching Grants,” detailing the project appeared in the April 2014 issue of Business Officer magazine.

Earlier this year, NACUBO and the Association of Governing Boards of Universities and Colleges (AGB), both of which worked on the project, submitted their final report to the Robert W. Woodruff Foundation, the project’s funder (additional support for the project was provided by The College Board). As the report notes, chief business officers can now use a set of common metrics, developed by an advisory committee of campus CBOs, presidents, and financial aid directors, for institutional aid, and access an online benchmarking tool that allows the comparison of recent aid allocation trends by institutional type and other characteristics, as well as by self-identified peer institutions. 

CBOs and other institutional leaders are often called upon by university presidents to re-examine their financial aid programs, especially in times of fiscal and enrollment stress. Their subsequent recommendations can yield the basis for minor adjustments to institutional aid programs, as well as set the path for major overhaul, if necessary. 

Spreading the Word

The Looking Under the Hood research team shared the information on metrics and the online benchmarking tool with CBOs and other campus leaders through demonstrations at more than 10 conferences, meetings, and webinars across the country, including the NACUBO annual meeting; the American Association of Collegiate Registrars and Admissions Officers Strategic Enrollment Management Conference; and meetings of CACUBO, National Association of College Admission Counseling, and Student Financial Aid Research Network. 

We estimate that more than 1,200 senioradministrators involved in campus decision making around institutional financial aid have been introduced to the project and experienced a hands-on demonstration of the benchmarking tool. Additionally, more than 1,200 unique users representing more than 630 colleges and universities now have accessed the tool, and about one-third of these users have created peer institution groups for comparisons with the tool.

The demand by colleges and universities for access to these data, and the positive response to the online tool’s comparison function, should come as no surprise. According to The College Board, higher education institutions provided more than $48 billion in institutional grant aid to students in academic year 2013–14. This represents a 92 percent increase over the past decade, and has put additional stress on college and university finances. 

The metrics developed for this project, and available via the benchmarking tool, remove a significant barrier for chief business officers by providing common definitions for various types of institutional aid expenditures, and by enabling campus leaders to assess how their institutional aid expenditures compare with those of peer institutions. 

Insightful Feedback 

Ten colleges and universities served as early adopters of the online benchmarking tool and institutional aid metrics. These institutions brought together small teams of senior leaders in November 2014 to use the metrics and tool, with the help of expert student aid consultants assigned to each institution. The early adopters provided insightful feedback about the metrics and benchmarking tool; praised the ease of creating peer groups; and advocated for additional metrics that allow for the benchmarking of institutional aid by race and ethnic groups, income levels, state residency, and funding sources. 

The adopters described the development of the online benchmarking tool as a breakthrough for higher education institutions. This ability to create peer comparisons on a common set of institutional aid metrics using previously collected data from The College Board’s Annual Survey of Colleges (ASC) and the National Center for Education Statistics’ Integrated Postsecondary Education Data System (IPEDS) was not available prior to the development and launch of this interactive, online tool. The easy access provided by the online tool creates opportunities for many more colleges and universities to use benchmarks to compare and consider institutional aid policies. (See sidebar, “Accelerating Institutional Aid Benchmarking,” for a firsthand account of an early adopter.)

 However, the users did note some weaknesses in the tool:

The College Board will help address some of these missing pieces. The 2014–15 academic year version of the ASC will include questions on the allocation of total institutional scholarships and grant dollars by race and ethnicity, and by income levels. 

Additionally, the survey will include a new question regarding the percentage of total institutional scholarships and grant dollars that are funded through institutional endowments. The data from this and other questions will be used to create new metrics, and are scheduled to be added to the benchmarking tool by spring 2016.

What CBOs Can Do

Colleges and universities face a competitive environment for students, but too often the focus on meeting enrollment numbers is divorced from the fiscal realities facing nearly all institutions. The underlying business model for most higher education institutions requires institutional aid policy to generate net tuition revenue targets needed to fund campus operations. And this fiscal reality generates tension with the goal of allocating institutional aid primarily or exclusively based on a college’s mission and values. 

The institutional aid metrics available via the online benchmarking tool can help chief business officers highlight this tension, and bring new information about institutional aid trends—along with peer comparisons—to their deliberations about institutional aid policies.

The four steps chief business officers should take now:

1. Sign up for access to the Looking Under the Hood benchmarking tool at

2. Create peer groups for your institution and explore the institutional aid metrics. Within the benchmarking tool, you can use the various aid metrics. 

3. Share the benchmarks with your colleagues to inform institutional aid policy decisions.

4. Answer the new institutional aid questions on the Annual Survey of Colleges, so that the tool can continue to provide improved and expanded metrics. The institutional research office at most institutions is responsible for completing the ASC. 

As colleges and universities face increased competition, and institutional grant aid is used as a lever to meet net tuition revenue targets, the launch of the AGB/NACUBO Looking Under the Hood institutional aid policy tool is timely. CBOs now have easy access to common institutional aid metrics that they can use to compare their college’s aid allocations with self-defined peer institutions. The tool should also help campus leaders strengthen policy deliberations and yield more sustainable institutional aid policies. With these common metrics now available to campus leaders, institutional aid policies can better reflect the core mission and values of colleges and universities.

DEREK PRICE is the principal owner of the consulting firm DVP-Praxis LTD.

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“As an early user of the tool, I found that it informed me of where my college stood in relation to some of its peers, and gave me a sense of the various metrics that go into a properly crafted institutional aid program.”

Gerald L. Hector, vice president of finance and administration, Ithaca, N.Y.