American Student Assistance 2006 Symposium Direct to Consumer Marketing

This year saw ASA’s most successful symposium ever. The event, coinciding with ASA’s 50^th Anniversary, was hosted in Boston and drew a record crowd of 375 attendees. Financial aid professionals from the world over gathered for the two-day event. This year’s theme: Insights: A Conversation on Student Debt, looked squarely at how debt is impacting the college and career choices of today’s students.

Roundtable Discussions

One of the things that sets ASA’s symposium apart from other conference events is the opportunity attendees have to take part in roundtable discussions on important issues facing the higher education financing industry today. This year our roundtables focused on:

– Direct to Consumer Marketing
– The Price Tag of Higher Education
– Counseling Graduate and Professional Students and Families on Debt
– Your Financial Aid Wishlist

Direct to Consumer Marketing

Below are the proceedings of the roundtable discussion on direct to consumer marketing from the ASA 2006 Annual Symposium.

Moderator:

What are some of your concerns about direct to student marketing?

Respondents:

– It promotes irresponsible borrowing.
– Students are getting too many things in the mail.
– It’s becoming an issue for the financial aid offices.
– Schools take the time to gather information and study lenders’ offerings. Their goal is to provide the best benefit to the borrowers when they chose which lenders to place on their preferred lender list.
– Lenders that students find through the mail could have processes and schedules that conflict with the financial aid office’s process and delay disbursement of the borrowers’ loans.
– Some schools will keep lenders that do direct to consumer marketing after they visit the financial aid office.
– This reflects their feeling that lenders should work with their financial aid office.
– In general, financial aid officers feel that this kind of marketing is not in the best interest of the borrowers.
– Students that are taking offers from the direct to consumer marketing are students that are not informed. They are not taking the initiative to research the company and the products that are offered.
– In fact, these students are not exploring further at all: They are just taking the application from the materials in the mail and applying, which can create a disadvantageous situation.
– Schools must provide the information to the lenders, but students might not be getting the information from the financial aid office at the right time.
– This method creates confusion for students, especially since they are getting so many different mailings.
– Students are not getting guidance when they complete forms they obtained through the mail and not through the school.
– It’s foreseeable that direct to consumer marketing for consolidation will increase dramatically after the elimination of the single lender holding rule.
– Schools are now being more proactive with their communications with borrowers, so students are more informed.
– Schools are also promoting word-of-mouth among the students to publicize that the financial aid office is a resource for more information.

Moderator:

What are the benefits of direct to student marketing?

Respondents:

– Lenders are providing increased options to borrowers; especially students at schools that do not go through the research to find the best deal for the students and parents.
– Families might not want to go through the entire financial aid application process, or they might not want to disclose their financial information to the school.

Moderator:

What are some recommendations to make direct to consumer marketing work better?

Respondents:

– The marketing piece should contain more educational information, for instance on financial literacy, not just information telling the student to get the loan.
– The marketing should be timed better. It becomes an issue when parents and students are getting mails telling that they need to complete the application as soon as possible, when the financial aid office hasn’t begun to process the student’s aid package yet.
– The loan programs should be clearly and accurately represented. For exampled, “SmartLoan” really means consolidation. There should be full disclosure.
– More regulation of this area is needed.
– Lenders who contact students in this way should notify the financial aid office that the student’s loan application has begun, so schools can be involved in the student’s borrowing choices.
– Schools don’t like to be surprised. Lenders should be up-front with schools regarding direct to consumer marketing initiatives.
– The Internet is only going to expand the importance of this issue in the future.
– Economics are driving this movement for lenders, and it’s going to continue.
– Schools become irritated because the “junk mail” is making it hard to get students to open and identify the school’s mail, which contains vital financial information.
– Schools are the “gatekeepers” of the process and still have control, since a lot of loans still require school certification.
– Lenders are faced with the challenge of getting students to pick them out of the school’s preferred lender list, so direct to consumer marketing is a way to increase brand recognition.
– Schools should take responsibility for promoting the lenders that are on their preferred lender list.

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