With enrollments and net tuition revenue at stake, more and more colleges and universities are seeking help from outside consultants in reviewing financial aid strategies. Here are 10 principles to follow to ensure that the consulting relationship is as productive as possible:
1. Be sure that the advice provided is data driven.
Although pulling together a data file including both admissions and financial aid information may not be easy if you have never analyzed financial aid strategies before, beware of any consultant who doesn't ask for one. Understanding how students have responded in the past to your offers of admission and aid are critical to the development of sound strategies that will better address the price sensitivity of your particular admit pool.
When consultants
recommend another firm's
product or service, find out what's in it for them.
A consultant merely recommending strategies that have worked at other institutions, without a data-driven analysis of your particular market position and of the price elasticity of your pool, can easily backfire.
2. Ensure that your consultant has experience as a practitioner.
When seeking advice about operations, many administrators intuitively understand that it is important for the advice to come from someone who has "sat in the seat" of the financial aid director. That kind of practical experience is equally important when seeking advice about the strategic use of financial aid. Without an understanding of need analysis, federal and state programs, alternative awarding approaches, and financial aid processes, consultants can fail to recognize inaccuracies in a data file, recommend packaging strategies that don't take full advantage of external aid resources, or develop recommendations that are extremely difficult to implement.
For example, a financial aid practitioner will know what to look for when "scrubbing" the data files you provide, and frequently a practitioner can identify problems with the data based on anomalies that only someone familiar with financial aid practices and programs could identify.
3. Beware of potential conflicts of interest.
If your consultants recommend a particular product or service offered by another firm (e.g., a loan product, software, etc.), make sure you understand what is in it for them that could be influencing their judgment. This is not to say that consultants who are receiving a referral fee or other compensation from another company will always be giving you bad advice. They should, however, be upfront about the arrangement and be able to clearly demonstrate why the option they are recommending is the best one for your institution.
4. Make sure that all parties have a clear understanding of the scope and the deliverables of the project.
Regardless of the specific reason for hiring a consultant (i.e., operations review, strategic financial aid review, retention analysis), it's critical that both parties clearly understand the nature and details of the project. Ideally, the specifics will be defined in writing and then signed by both parties. This should include a summary of the recommended approach and objectives, the techniques used in the analysis, the costs, a timetable for completion, and the "deliverables."
Of course, a consultant may provide additional insight and analysis above and beyond what is outlined in the agreement, if appropriate. But the agreement will help ensure that the project outcomes meet your most important needs. Ideally, the report will be initially provided in a draft form so that you and other administrators have an opportunity to provide feedback and make appropriate revisions prior to final submission.
5. Talk to any potential consultant over the phone before making a decision about who gets the job.
Once you have identified a possible consultant, give him or her a call. Even if you are going to be issuing a formal RFP, take the time for some informal contact to ensure that the folks with whom you will be working are good listeners, that they will shape their approach to best meet your needs, and that the "chemistry" feels right.
6. Talk to other clients who have worked with the consulting firm.
