How Do Universities Segment by Financial Aid Need?
Universities can segment prospective and enrolled students based on their financial aid needs to tailor scholarship offers, financial advising, and support services. This segmentation allows institutions to focus resources where they can have the most impact on student success, ensuring equity and enhancing retention.
To segment by financial aid need, universities collect and analyze financial information from students, classifying them into groups based on their expected family contribution (EFC). These groups can then receive targeted offers, personalized financial support, and appropriate messaging throughout their enrollment journey.
What Matters for Financial Aid-Based Segmentation?
The Financial Aid Segmentation Playbook
Follow this playbook to create a scalable and ethical segmentation strategy that helps universities support students based on their financial need.
Define → Segment → Tailor → Engage → Monitor → Refine
- Define segments: Establish financial need bands (e.g., low, medium, high) and ensure financial aid data is collected consistently.
- Segment data: Classify students based on their financial need and use your CRM/MA systems to tag and track their status.
- Tailor financial aid: Offer personalized scholarship, loan, and work-study packages for each segment to ensure that the right students receive the right support.
- Engage students: Use targeted communications to encourage timely application for financial aid, provide personalized advising, and help students understand their funding options.
- Monitor financial aid progress: Continuously track the status of students’ aid applications, adjustments, and renewals, ensuring support is provided in a timely manner.
- Refine and scale: Use insights from data analysis to refine segments, enhance resource allocation, and improve engagement strategies to further support students’ financial needs.
Financial Aid Segmentation Maturity Matrix
| Stage | Characteristics | Focus for Institution |
|---|---|---|
| Ad Hoc | Financial aid data exists but segmentation is not yet implemented. Financial aid packages are offered uniformly. | Formalize financial aid need bands and integrate them into CRM/MA systems for better segmentation. |
| Managed | Financial aid segmentation is in place but needs refinement. Communications are starting to become tailored for different need bands. | Expand segmentation efforts, tailor messaging, and integrate more dynamic financial aid packages to meet student needs. |
| Optimized | Fully integrated segmentation with proactive outreach, continuous monitoring, and personalized financial aid packages across all stages. | Scale the financial aid segmentation strategy, continuously optimize, and refine packages to support retention and progression. |
Mini Case: University X Enhances Financial Aid Segmentation
University X improved retention by segmenting financial aid packages
University X introduced a tiered financial aid strategy, targeting students in the low, medium, and high need bands. The institution implemented tailored communications, personalized scholarships, and advising to improve retention rates for students in high-need segments. Over a 2-year period, retention rates increased by 15% for students in the low-income segment, and 10% for the medium-income segment.
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