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Will the SCOTUS Ruling Influence Financial Aid Strategy?

Episode 165

September 12, 2023 27 minutes


EAB’s Vashae Dixon and Brett Schraeder discuss the ways in which financial aid professionals are adapting to the recent SCOTUS ruling barring consideration of race or ethnicity in university admissions. The two share best practices for institutions on how to navigate the intersection between financial aid optimization and diversity.

They also talk about criticisms they are hearing from university leaders in response to guidance offered to date by the Department of Justice.



0:00:11.3 S1: Hello, and welcome to Office Hours with EAB. The recent Supreme Court ruling is having ripple effects on how admissions teams approach every aspect of their job. Many are beginning to rethink their strategy for allocating financial aid. Our experts today discuss the concerns they are hearing from admissions and financial aid professionals, and offer tips for institutions on ways to use financial aid as a tool to continue hitting enrollment goals without crossing legal or ethical lines. Give this episode a listen and enjoy.

0:00:49.3 Vashae Dixon: Hello, and welcome to Office Hours with EAB. My name is Vashae Dixon, and I am a senior director in EAB’s research division, working in the areas of enrollment at both the graduate and undergraduate level. Today we’re going to be talking about how admissions and financial aid professionals are adapting to the recent SCOTUS ruling barring the consideration of race or ethnicity in university admissions, so this is a top-of-mind topic for me and for a lot of our partners across the country. I’m joined today by my colleague, Brett, I’ll give him an opportunity to introduce himself as well, and give us a short summary of what you do here at EAB.

0:01:25.4 Brett Schraeder: Thanks, Vashae. My name is Brett Schraeder, and I’m the managing director for the financial aid team, part of the enrollment division as well, colleagues with Vashae, and been at the EAB about eight years. And before that, spent about 20 years in campus roles as well. So happy to be here and talk about this important topic.

0:01:45.3 VD: Awesome, thank you, Brett. I’m going to start with what feels like a very obvious question, but if you could provide just a quick explanation for the benefit of anyone who’s listening that isn’t as scrubbed in on what the Supreme Court Ruling means or why it’s such a big deal.

0:02:00.1 BS: Yeah, I think it’s been sort of this long… We knew it was coming, and finally, the decision came down earlier this summer. Basically, the Court ruled out any consideration of race in the admission process, and what that means is schools, particularly the very selective schools that were using race in a narrow way to kind of weight an admission decision in a particular way, they can no longer do that. So that’s important, because it does change the way, really all schools have to look at this. Now, for the very selective schools, they’re going to have to actually change the way they do their admission work, and you’re hearing things like the Common App is going to offer schools the option of hiding race on the application, so it doesn’t come up in any conversations, those kinds of things.

0:02:58.2 BS: So those schools will very functionally take it out of the process, but it does affect all schools, even those that aren’t extremely selective, those that are even open admission, because we have done a good job in higher ed of really thinking about ways to support under-represented students, and so that sort of finds its way into lots of different things. So schools are really just going to have to step back and take a little bit of an inventory of what they’re doing and making sure that what they’re doing doesn’t feel like it’s crossing the line into impacting admission decisions.

0:03:36.6 BS: And so the good news from the Court, though, is that they really focus pretty narrowly. John Roberts described it as the zero-sum game of admission, but didn’t really address the what we would call up funnel, so the recruitment activities, outreach to certain schools or certain groups of students, certain community-based organizations, and then on my expertise side, they didn’t really say anything about financial aid, although that’s probably one that we’ll get more into today as well, but those are kinds of the things we’re thinking about. I’d be curious to hear if you’d add anything to that, Vashae, that I missed…

0:04:19.3 VD: No, I think you’re absolutely right. And one of the things that you mentioned sparked a further question for me on how different types of schools are thinking about this ruling, and how as we work to help our partners, how we’re thinking about providing support based on the different goals of different types of institutions, be they open access institutions, be they more selective institutions. But I know that there are a lot of pieces of guidance out there, a lot of information, I’m using the word a lot loosely here, that word is doing a lot of work, but lots of information regarding just initial reactions and guidance on what is and what is not permissible in light of that ruling. Could you share with us a little bit about what you’re seeing with regards to that guidance?

0:05:07.5 BS: Yeah, I think just probably like every podcast or article that folks have heard or read out there, it’s probably going to be frustrating, because there’s more questions than there really are answers. We have the singular answer of it can’t be involved in your admission process, but then schools can ascertain whether race has impacted students’ lives, and they can ask about that in the essays. In fact, many institutions are actually doing that, there was an article I read just the other day, and several institutions, Harvard and BU and others are asking students specifically how certain things have affected them, so giving the students the opportunity to talk about their race. So even in that part, students, it’s not completely out of the question that that would be considered, so that’s something to know.

0:06:05.8 BS: But the guidance out there, there was some early thought that maybe you couldn’t even track sort of at a high level what was going on in your admit pool as an example, that was one thing that we heard a lot about, and meaning you couldn’t pull up a report and say, hey, of the admits we have to date or of the applications we have to date, 30% are under-represented students and 70% are not, or whatever that is, that seems to be okay from the Department of Justice guidance. But I think with everything today, we’re going to say, you should probably talk to your own institution’s lawyer before you make any decisions, because we’re not giving legal advice today, but I thought that was good news, that we could… That it did seem like tracking would be an option.

0:06:54.9 BS: One thing I heard along those lines is I heard some schools separating the folks who actually read applications from the folks who sort of look at reporting and kind of understand what’s going on as a way to say, hey, we’ve got a firewall between the two. I think we both know that that can work for some institutions with bigger staffs. For our institutions that are smaller and just have everybody kind of does everything a little bit harder, so I think that was one thing that opened up. I’m curious, are you hearing other things that schools are sort of saying, gosh, we’re a little worried about, or we absolutely are doing?

0:07:30.5 VD: Similarly, seeing that there is some precaution against separating the two between those that can see a student’s race and demographic information, and those that are making the decisions, and then there are just two very different sides of the spectrum, some institutions that are taking the approach are saying, we are going straight up to the line that we can go to. To your point, the affirmative action ruling noted that you can consider a student’s experiences via essay, etcetera, and some institutions have directly asked, how does this ruling impact your goals for college? I don’t know how more you can be obvious with that type of question, the type of information that you’re looking for there about that student experience.

0:08:10.8 VD: And then there are other institutions that have gone far, far in the other direction, and saying, we’re not asking any questions related to that in essay form or otherwise, and we’re expanding that beyond admissions, even into hiring and into other parts of the university. And so we’re in a space right now, and I’ll use your phrasing of check with your legal counsel, but we’re in a sense right now, where everyone is just testing the waters in light of this ruling coming out and better understanding kind of what their capabilities are as an institution. I would say, and talking to partners, they’re expressing a couple of main things. First, how do we stay committed to our diversity goals on campus in light of this ruling and in light of the changes that are now coming with the admissions process.

0:08:55.4 VD: And then there are two areas that I’ve seen a lot of partners really focused in. Number one, What do I need to do right now to ensure that I’m compliant, what processes do I need to check, what measures need to be put in place, what are the immediate implications. And then number two, what are the other shoe and/or shoes that may drop, and that’s going to lead us a little bit into our conversation about financial aid. But in addition to financial aid, what does this mean in the future for recruitment practices, what does this mean in the future for hiring practices, what does this mean in the future for awarding aid and trying to be proactive about some of those other shoes that may drop as a result of this particular ruling.

0:09:33.0 VD: With that, I want to pivot us for a quick second, play devil’s advocate for a little bit, and ask you how institutions are thinking about financial aid or what it is that you are seeing in response to this decision in the financial aid realm.

0:09:47.0 BS: Yeah, it’s a great, great question, and I would second your sense that I think all of us feel like universities shouldn’t step away from their commitment to diversity, they may just have to think about it a little bit differently in how they act and what they say out in the public. And so that’s one of the things we’re trying to help our school partners understand is what role does financial aid play. Now, we know not every partner uses financial aid in a way to impact their diversity goals, some use it more specifically, some use it in a more general way, but one of the criticisms of the Department of Justice guidance was, they sort of called it the elephant in the room, of financial aid wasn’t addressed at all, and I like to focus on the sense from… Go back to that, what I said about John Roberts at the beginning. One of the things he really laid down in his opinion was that zero sum.

0:10:47.4 BS: And so zero sum in admissions is true, right, if you are not admitted to an institution, you cannot attend that institution, we know that, and if you are admitted, you can attend. Financial aid operates slightly differently because students get different financial aid awards based on all kinds of different things, based on academic merit or financial need, using the FAFSA form or the CSS Profile. You can say students, in state students in public institutions get a different tuition than out-of-state students at those public institutions, so there’s all kinds of different things, but those things in and of themselves don’t prevent students from attending.

0:11:28.7 BS: So it’s not a zero sum game. We did see the state of Missouri, they had some race-based scholarships that they immediately said we’re not doing those anymore, and so that was one interpretation. Then you have over in Wisconsin, which they’ve had a retention scholarship for under-represented students since the ’80s, which has never come up for scrutiny, which is sort of kind of shocking to believe that no one’s ever brought that up, and they’re sort of debating whether that is still legal, that’s actually in their state law, that scholarship. So we’re really seeing a breadth of different things. I think some of our institutions will actually look at race when they’re awarding certain scholarships, some scholarships are the funder, the donor called out specific groups in their plan to have this go to certain students.

0:12:28.9 BS: We had one institution that has a fairly large historically black fraternity and sorority presence on campus, and they… Some donors have given scholarships for students in those fraternities and sororities, they asked us, hey, is this okay. Interesting question, right, because those sororities and fraternities are not exclusive to black students, but they serve a number of black students, so does that cross the line or not. And now we’re into the we can’t really tell you whether it crosses the line or not because there hasn’t been any guidance. But I think what we’re hearing from our partners is that really that inventory of what is and isn’t based on race in their financial aid program, and then can they get at, and this may be a conversation I’d be curious to hear your thoughts on, can they get at these things in different ways, so can they look just that financial need?

0:13:23.8 BS: And that largely covers a lot of the goals that they had before when focusing on only race, can they expand their recruitment in such a way that it sort of necessarily allows for financial aid to cover students from different races. And so those are things our partners are thinking about, but I think some are sort of saying, hey, this is totally off-limits, and some are saying, you know what, we’re going to wait, until they specifically tell us we can’t do this, we’re going to keep doing it, and everywhere in between, and this is… I think this is the most interesting challenge for our partners is, because even just from a competitive standpoint, like, hey, you want to hit your class, you want to enroll the class that hits your mission and goals, if the partner down the street has a little bit more loose interpretation of the SCOTUS ruling and your institution has a little bit more strict interpretation, you might be at a little bit of a disadvantage for a while until some of these things get clarified.

0:14:27.2 BS: So those are some of the things we’re hearing. I’d be curious to hear if you’re hearing additional things or just how schools are saying, hey, here’s how we’re going to do this in the future, given what’s going on.

0:14:39.4 VD: Yeah, I think you bring up an interesting point when you think about getting at some of these goals in other ways, and that immediately brings me to think about proxies and how there are different identifiers or markers for groups of students, and I know that proxies have also been under a lot of scrutiny from a research perspective in terms of how accurate they are and how applicable they actually are to the goals that you’re trying to reach. I don’t know that there’s a perfect answer there and what that would look like. I’m curious for you, because you also mentioned something that was pretty interesting in that in the state of Missouri, they have moved away from their scholarship offerings, and I’m curious if you’re seeing more, obviously for public institutions, state level decisions, or are you seeing more institutions individually trying to decipher what this ruling means and how they’ll press forward?

0:15:39.7 BS: Yeah, that’s a good question. I’m definitely seeing a little bit of both. I think there’s a worry out there, which I share that worry, that… And I know Shaun Harper at USC has said this too, is that this sort of overreach with the decisions, and I think at the state level, I think one of the things is… One of the things we’ve all seen a lot, we’ve been hired a long time, the politicization of higher ed in the last few years has gotten very extreme and sort of really become a thing. And so what I think we worry about at the state side and what we hear from some of our publics is, this is just yet another way for the legislature to essentially press their will on colleges.

0:16:29.5 BS: So we’ve heard a lot, Florida’s obviously a good example of, we’re not going to do any money toward DEI efforts, we’re not going to do certain curriculum things. And so this is yet another thing like, hey, the Supreme Court said we can’t do any of this, so we’re not going to do any of it. And so I think that’s where the worry is, we’re sort of taking some of that control that individual institutions have in thinking about this and really living with their competitive environment and pushing it up to the state level, which I think is… It could be a huge challenge.

0:17:04.7 BS: And unfortunately, at the end of the day, I think it’s a huge… Which is where I really come from is, it’s not good for students, it’s not good for our college-going rates, it’s not good in supporting students to get to college, and so that’s who the ultimate losers are in this. It is the students that are thinking about college, and so I think that’s where we’re hearing it as well.

0:17:31.3 VD: I think that’s absolutely right. And to the point you made about Shaun Harper and thinking about interpretive overreach and who is the… Who that is consequential to most being the students, and not just the students of color that are impacted from a mission standpoint, or could possibly be impacted from a financial aid standpoint, but students across the entire student body, and where that line is, and that acceptance of risk. If you will, is between being proactive, anticipating things that might be coming down the pike, safeguarding yourself from future litigation and where you can currently serve students right now. Putting you in a tough position because I know that there’s not an answer to this per se, but as you think about how institutions are weighing that, not necessarily risk reward, but weighing that risk against what the benefits to current students may be, what are some of the factors that they’re considering in that? Have you heard any of that conversation on the campuses that you’re talking to?

0:18:35.6 BS: Yeah. I think that the place where most admission and enrollment shops feel fairly safe is up funnel, so just that, the way we really stay diverse and keep to our mission, and really to have the diverse campuses we’ve already created is to be even more intentional in finding pockets of students that meet their goals across the region, sometimes across the country, for certain schools. And so that seems to be least risky, at least so far, is that that up funnel, get as many students in the pool as you can, because the likelihood you can meet your goals is going to be higher. I think as it travels down funnel and then all the way to the financial aid, and then even to retention, and I think that gets maybe a little bit more challenging, because the risk… I think the reward can still be high, but the risk goes up as well.

0:19:38.6 BS: And so I know when I first got to campus as a senior leader about 15 years ago, the campus counsel said, everything we do is just about how much risk you’re willing to take on, and I think that’s true in this case. And so the top level of the funnel is really where I see most schools really thinking about like, okay, how do we really focus there to get that pool together, and then as we get further down the funnel, I think it becomes so close to the admission of students that I think that’s where you start hearing folks feel like it’s a little bit more of a gray area. But I don’t know, what are any thoughts you would add to that?

0:20:24.9 VD: I would agree with your analysis of the top of the funnel. As of now, recruitment efforts are untouched, if you will, by this ruling, so it seems as though recruiting for specific types of students, and even going so far as to have specific initiatives to recruit those students or activities to recruit the students, etcetera, is within bounds. So it is legal, and so I would definitely consider making some big, heavy investments at the top of funnel where it seems to be a little clearer on where the line exists, and then as you get down, making some of those more thorny decisions about the actual admissions process. So that would be one area.

0:21:07.0 VD: When you think about levels of risk, and as we all think about the risk-taking that goes into these processes, I also think you’re right in that, where is that fine line between meeting are our mission and goals and our initiatives and also in the gray area of either within the decision and within the narrow scope of the SCOTUS decision, the long SCOTUS ruling that has already come out, or within, like I said, the other shoes that could potentially drop in the future, but as we think about the top of funnel that right now looks to be untouched, I think that would be a great place to make some investment.

0:21:45.1 BS: Yeah, I totally agree.

0:21:48.2 VD: Are there other areas, Brett, in terms of financial aid specifically, that we haven’t touched on yet, that we should be thinking about, or questions that you think some financial aid leaders should be asking themselves and their teams?

0:22:02.6 BS: Yeah, it’s a good question. I think sort of understanding the experience our students have had up to this point, particularly your under-represented students, your diverse students, what has been their experience with financial aid, what aid have you provided them, even if you haven’t differentiated aid dramatically, like where do their challenges exist and why. And it’s very possible those challenges are experienced by students who aren’t under-represented too, and so thinking about how your aid might focus in certain ways to help the students that you understand to be the ones that have had the most challenge financially.

0:22:45.2 BS: And so some data analysis and some understanding of that is really probably warranted, because I think most enrollment people I know have a pretty good sense of what’s going on, and many of them have really great data behind it, but taking that extra step and sort of watching as students progress and seeing where the financial challenges are when students do choose to leave, like what’s going on there, and then trying to craft your policy around understanding those challenges, ’cause I would guess that it’s often very likely the challenges are not specifically called out as around race and ethnicity, they’re probably called out around finances and managing family or doing those kinds of things. And so thinking about how you create programs that support those students, or maybe even re-crafting some of the programs you have that are very specifically for certain students in ways that support a little bit differently. I think we’re just going to have to do that.

0:23:47.9 BS: And even if you keep what you already have, if you have some race-based awards or those kinds of things, you have to be ready to pivot, because even if you say, hey, look, we’re willing to take the risk, we’re willing to keep these awards, at some point I think this is going to land in the courts. I think everybody sort of understands that. And so you’ll have to make that pivot at some point, and we’ll have to be ready for that, so that’s really just another piece of advice. I wish I had a specific if you do this, you’re safe, and if you don’t do this, you’re not safe, but I know it’s just something we’re just working through with our partners, just like everybody else.

0:24:29.5 VD: Absolutely. So Brett, I want to ask you, I know that we’ve talked a lot about different options for institutions, different avenues that institutions have taken in light of this ruling, the guidance that has been provided that is also gray in a lot of the ways that we’ve discussed, but if you had to give one to two pieces of advice to our partners, to the institutions that you work with in light of this ruling, what would you say?

0:24:57.0 BS: Yeah, great question. The two things I would say, and probably a little bit of a recap of what we’ve already said is, is you really need to sort of inventory all the things you’re doing around race and ethnicity, and sort of test them against your risk profile, and are you willing to keep them going or do you need to adjust them in some way. And then the other thing is really take a hard look at your up funnel activities and see where you can bolster those, because those will pay off I think in the end. I’d be curious, do you have other recommendations for our partners?

0:25:38.7 VD: Brett, I would echo your second point of really looking at the top of the funnel, taking what is included in the ruling, what guidance we’ve gotten from the DOJ and finding those areas that feel much more clear with regards to what the guidelines are and where do those bright red lines are, and I would focus resource and focus intensely on those particular areas, one of them being top of funnel, so as you think about recruitment efforts, as you think about retention efforts, I know that we’re talking a lot about admissions and point of admission for students and getting them into the institution, but they also made a note about retention efforts as well, and keeping those students enrolled, which is a big piece of the diversity initiatives on campus.

0:26:20.2 VD: So I would really take a hard look at that and finding the areas that feel more clear and really investing heavily in those, while proactively anticipating what other shoes may drop. So financial aid is one of them that you mentioned earlier. I think you’re right, and I think that most folks in this space would agree with you that at some point there will be some ruling related to financial aid. Now, how wide or how narrow in scope that may be, we’re unsure, but it would absolutely be worth it at this stage to take an inventory of your financial aid practices, your financial aid policies, how you’re awarding aid to students, and understand what it is that you should be prepared for in the future.

0:27:01.4 VD: So Brett, I know that this is a very thorny challenge, has lots of serious implications, not just for the partners that we work with, but also for students, as you’ve made note of quite a few times, and I echo that sentiment as well. Well, I know that this is a very complex issue and concern, not just for us here at EAB, for all of the partners that we work with. Brett, I want to thank you for providing some perspective on not just the financial aid aspect, but the overall ruling. Thanks for joining me on Office Hours with EAB.

0:27:31.3 BS: Thanks, Vashae.

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