The effect of institutional financial aid and other factors on freshman matriculation decisions

Financial aid in private universities is one of the largest and fastest growing university budgets. Yet, few sophisticated tools have been developed to assist institutions in understanding the effects of and making strategic choices regarding institutional financial aid. This institutionally-based study at the Rochester Institute of Technology sought (a) to identify major factors affecting matriculation decisions of freshmen admitted to a moderately selective, independent, technological university; (b) to assess the effect of institutional financial aid and other factors on matriculation decisions; and (c) to develop models useful to institutions for enrollment forecasting and planning, and for optimizing the utilization of institutional financial aid. Data sources for the study included admissions and financial aid records, and student response information from the administration of The College Board\u27s Admitted Student Questionnaire (ASQ). 3970 students admitted in 1995 were included in the study, 46% of whom completed and returned the ASQ. Adding perception information from the ASQ enabled the study to assess not only independent effects on enrollment of background, financial aid, achievement, and other independent variables, but also the influence of perceptual ratings of college characteristics, informational sources, and financial aid for two institutions in the choice set. Eight models were developed using OLS regression by stepwise adding independent variables to a Base Model, which explained 24% of the variance in the matriculation decision. The Comprehensive Model, which included 20 variables significant at p $\le$.01, explained 66% of the variance. All models accurately predicted actual enrollment. Derived independent factors representing differences in ratings between competitor institutions had powerful effect on matriculation decisions. Most influential were academic characteristic related factors. Institutional grant amount demonstrated moderate effect on matriculation probabilities. When grant amount was combined with importance of financial aid, net cost of attendance, and presence of aid award, these aid variables collectively accounted for 8.5% of the variance. Specific findings about the effect of these and other independent variables on matriculation probabilities are presented and discussed. Methodology and findings of models can assist institutions wishing to conduct similar research about factors affecting freshman matriculation and assist in weighing strategic alternatives about institutional financial aid