Methodologies, Research, and Exploration: Getting Help to Those Who Need it Most

Goals and Expectations General statistical overview. To stimulate some research ideas. Talk about what is going on in the financial aid community.

Painting the default landscape Statistics from the College Board Life of the loan default rate 1996: CDR 9.6% 2002: CDR 5.6% 1996: Portfolio Default Rate 17.91% 2002: Portfolio Default Rate 13.65% Elimination of 25% ceiling Currently if life-of-loan were enacted this would eliminate proprietary associate degree schools, proprietary post-graduate schools, proprietary bachelor degree schools, public associate degree schools (community colleges).

Tale of two campuses X University Default Aversion Plan Blankets the entire student population. Y University Default Aversion Plan Chooses select group of students, based on research, to target and help.

What is research? Research is the simple act of carefully observing some thing, situation, or phenomenon in order to learn more about it and better understand it.

MYTHBUSTERS Myth: I need to be an expert to do any type of research effectively. Truth: We do research everyday through the observations we make. Personal research: what our spouses like or dislike, what is acceptable behavior at work. Financial aid research: complete survey, respond to a request for information about our programs, assess how a regulatory change impacts our students.

MYTHBUSTERS Myth: I need to be an expert to do any type of research effectively. Truth: FAAs do need a basic understanding of how to: 1. Start research projects. 2. Find and collect research data. 3. Analyze data. 4. Publicize results.

MYTHBUSTERS Myth: I don’t have the time to conduct any research. Truth: Some of the simplest research can be conducted in a very short amount of time. Truth: Others are interested in helping you: Graduate students. Collegiate institutional studies faculty members. Guarantors, lenders, or other outside partners.

MYTHBUSTERS Myth: We don’t have the resources (i.e., time, people, etc.) to do this work. Truth: Doing this research may take less time than you think, especially by using existing data.

MYTHBUSTERS Myth: We don’t have the resources (i.e., time, people, etc.) to do this work. Existing Data Sites and Reports: NASFAA Annotated Bibliography of Student Financial Aid MGA Default Aversion Database US Dept. of Education’s National Center for Education Statistics The College Board: Trends in Student Aid, Trends in College Pricing, Annual Survey of Colleges The College Board: Trends in Student Aid, Trends in College Pricing, Annual Survey of Colleges Pell Grant End of Year Report (DOE - OPE) Federal Loan Volume Update (DOE – OPE) Survey Report (NASSGAP) See Research Tools, Tips, and Resources for Financial Aid Administrators for a complete list (enclosure).

MYTHBUSTERS Myth: Research and statistics can be so boring!! Truth: Research is exciting!!

Stay Away From Hype “You should know the truth about financial aid offices…” “They’re supposed to help you choose the best lenders. But in reality, they may steer you towards lenders that benefit them. Not you. Unless you check for yourself, how do YOU know you’re getting the best loan?” My Rich Uncle Ad – New York Times, July 16, 2006

Formal vs. Informal Formal research: hypothesis, literature review, collecting data, analyzing data, limitations, inference, correlations, conclusions, and publication. Informal research: used internally; much more informal which contains some overlap. Which to use? Depends on scale of project.

Informal Research 1. Come up with questions. 2. Find alliances. 3. Map out research method. 4. Analyze results. 5. Informally publish findings (share with the community).

Statistical Basics Taking out the Bias: 1. Choosing Samples 2. Data Collection Unambiguous Answers Control vs. Experimental Groups

Statistical Basics Analyzing data: Frequency tables: Percentages Mean, Median, Mode Descriptive statistics Bar charts, pie charts, histograms Comparing groups

Statistical Basics Guesstimating with confidence: Confidence intervals: getting the results that we expect. Granholm 45% / DeVos 41% with +/- three percentage points with a 95% level of confidence.

Statistical Basics Difference between causation and correlation:

Statistical Basics Difference between causation and correlation: Only a very well drawn-out study can determine causation. If you have a strong correlation between two variables, perhaps some prediction is in order.

The End Result I have yet to see any problem, however complicated, which, when you looked at it the right way, did not become still more complicated. - Poul Alderson ( ) in "New Scientist", 25 September 1969

The Reason... because it’s the right thing to do.